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Private Education in India
Sebastian Mallaby has a good column on the explosion in private schooling in India and the implications for theories of development:
More than four out of five Indian engineering students attend private colleges, whose potential growth seems limitless. ...
Something similar is happening to the Indian school system...Since the early 1990s the percentage of 6-to-14-year-olds attending private school has jumped from less than a tenth to roughly a quarter of the total in that cohort, according to India's National Council of Applied Economic Research. And this number may be on the low side. James Tooley of the University of Newcastle in Britain has found that in some Indian slums about two-thirds of the children attend private schools, many of which are not officially recognized and so may escape the attention of nationwide surveys.
The causes of this private-school explosion shed interesting light on debates about development, not just in India but throughout the poor world. The standard assumption among anti-poverty campaigners is that education leads to development...the recent private-education boom in India shows how causality can also flow the other way...Since India embraced the market in the early 1990s, parents have acquired a reason to invest in education; they have seen the salaries in the go-go private sector, and they want their children to have a shot at earning them... Once parents understand that education buys their kids into the new India, they demand it so avidly that public money for schoolrooms becomes almost superfluous.
... Apparently unconnected development policies -- cuts in tariffs and oppressive business regulation, or projects to build roads and power grids -- can sometimes stimulate new educational enrollment at least as much as direct investments in colleges or schools.
See my earlier post for some more references.
I know that we have a number of readers in and from India so comments are open if you have further information.
Posted by Alex Tabarrok on January 3, 2006 at 07:13 AM in Economics | Permalink
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Comments
The rise in private school attendence basically pertains to newer urban locales. In Bombay, most of the middle-class kids were already in private schools.
Posted by: Gyan at Jan 3, 2006 7:49:23 AM
My wife and the majority of my Indian friends here in the US were forced into private schools because of the reservation system.
So I wonder how much of the explosion in private schools is a function of the reservation system which drives many members of the "forward castes" out of public schools and into private schools. To give you an example, I believe in Tamilnadu 70% of the seats are reserved for members of the "backward castes" with the remaining 30% being open to all castes.
In economic terms, I'm asserting that the demand curve didn't move. Rather, the government dramatically lowered the price ("backwards castes" being assured seats and at a cost of next to nothing to free) which greatly increased the number of people entering the public education system - more than could be accommodated. Then at the same time, excluded those willing to pay a higher price from the system (or in many cases, the private schools offered a lower price for the same good).
Note I am not asserting that the demand curve did not shift in response to improvements to the economy. But I am asserting it's secondary in effect to the effects of the reservation system.
Posted by: Jody at Jan 3, 2006 9:05:36 AM
Private schools are good business. Lots of NRIs (non-resident Indians) realized that opening a school was a good way to give something back in a financially satisfying way (I'm not being cynical; merely noting the financial benefits). However, the opening of schools is still mired in all kinds of regulations, and anyone hoping to do so needs to grease a lot of palms in the government; this has no doubt made the growth of private schools slower than it need be.
The real problem (and here I know only about Delhi) is that since there is a financial incentive to run these schools (and teachers are paid much better), the student population is not drawn from the poorer sections of population but from the more well-off. Private school admissions have in the past been famously difficult; long lines of parents, "parent interviews", the works, so even if these schools cater to the well-off, they are still tapping into unsatisfied demand, which is great.
However, because of this, it is not clear whether the growth of private schools will effect a broad-based quality shift in education across the much larger poorer section of the student population. A secondary issue is that the quality of these schools is still a big question; presumably that is a matter of time, and the inevitable shake out.
Posted by: Suresh at Jan 3, 2006 9:18:01 AM
Funny how with the high return on education in the US so little gets invested in education by the lower income people in this country (except the immigrants). My experience going to high school in middle America, and I'm sure it's true for most people, is that there is strong peer pressure to underperform - i.e. no one wants to be seen as a geek. The more I learn about economic history the more I come to the conclusion that the only reason the US is so much more economically advanced then the rest of the world is merely due to the fact that we, for the most part, avoided the mistake known as socialism.
Posted by: asiequana at Jan 3, 2006 9:24:03 AM
The state of Karnataka allowed (in the eighties, before liberalization began) private colleges to offer programs in engineering and medicine, unleashing a revolution that continues even today. Many states follow this model.
See this post by Brad about a recent McKinsey report:
http://delong.typepad.com/sdj/2005/12/how_fast_can_in.html
It points to some of the poor outcomes of this model.
Given the wide publicity for the McKinsey report, I am surprised Mallaby doesn't say a word about it.
Posted by: Abi at Jan 3, 2006 9:24:48 AM
It is not just India. In all sorts of places around the world private universities are thriving. I do a lot of work in Mexico and there the private sector is robust. Same for Eastern Europe where a couple of friends have worked with the new institutions.
Posted by: drtaxsacto at Jan 3, 2006 10:11:22 AM
An excerpt of definite interest from James Tooley in an op-ed from back in October:
http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A99343
"Visit one of the public primary schools on the outskirts of Kibera and you will find classes packed with 80 or more children and a headmistress who is openly disdainful about the lowering of standards by the influx of “smelly, dirty” slum children. But venture into the slum itself, and you’ll find evidence of the educational revolution taking place.
My researchers found 76 private schools there, serving more than 12000 children. Probing deeper, we found evidence of 25 private schools that had closed since the introduction of free primary education. At best, the reported increase in enrolment in the five government schools on Kibera’s periphery was entirely accounted for by children transferring from private slum schools.
Free public education, in other words, has done absolutely nothing for overall enrolment. Even now, about 70% of children from the slums still attend private, not government, schools.
There is a misconception that it is good to transfer children from private to government schools, taking the line of the UK’s Commission for Africa, which reports that the “mushrooming” private schools are of low quality. But why would poor parents pay to send their children to schools of low quality, when government schools are free?
I spoke to parents who had transferred their children to government schools when free education was introduced, but who then, disillusioned, returned to private education. In government schools, teachers could not cope with 80 pupils, five times the number in private classes. One parent summed it up: “If you go to a market and are offered free fruit and vegetables, they will be rotten. If you want fresh fruit and vegetables, you have to pay for them.”
My researchers tested 3000 children, roughly half from the Nairobi slums and half from the government schools on the periphery, in mathematics, English and Kiswahili. Although the government schools served the middle classes as well as slum children, the private schools — serving only slum children — outperformed the government schools in maths and Kiswahili, although the richer children had a slight natural advantage in English. When we statistically controlled for background variables, the private schools outperformed government school children in all three subjects."
Posted by: Alec van Gelder at Jan 3, 2006 10:44:31 AM
What growth??
With more than 50% of the population under 25 years of age, whatever growth we're seeing is NOTHING compared to what we NEED. Government intervention and licensing has ensured that education stays out of access for most of the poor and 'uninfluential'.
Is there any part of the educational system that the government doesn't interfere in and screw it up?
The weird thing is how people (including many of my friends) want to restrict growth of private institutions, in the name of standards. Unless people let go and leave private institutions alone, there is no hope for the poor millions in India. On the other hand this is a good market opportunity for other countries with a less beaureaucratic burden (the Indian govt. i.e.).
Posted by: Abhinay at Jan 3, 2006 1:16:24 PM
I've seen increasingly more plainly bogus scientific research from "professors" and their research groups at these Indian "universities" published in reputable American science journals. (It's apparently no problem at all getting through scientific peer review in the US; see under Hwang Woo-Suk.) It's a disturbing trend that will affect India's reputation in some scientific circles if it worsens.
Posted by: Chuck at Jan 4, 2006 12:25:21 AM
@ Abhinay: The reason why many want to restrict growth is simple - the private education sector lacks accountability. The one regulatory body (AICTE) that can do something about it is an absolute dud, with many representatives on the board being chosen from the promoters of private schools. You only have to search for the term "IIPM" in google to know what I am taking about.
Posted by: Bharath M at Jan 4, 2006 4:00:00 AM
Education is a heavily regulated sector in India. So even though there is a boom at both the High-end and the low-end of the price spectrum. The low-end is illegal or atleast unrecognised, so at the most the low-end schools are able to provide and education but not a reconginsed high-school diploma.
There is a huge number of people who aren't educated or even enrolled in schools, but the way the government tried to deal with this was by introducing a law in parliament which would make low-end schools illegal, and quasi-nationalise many of the higher-end schools, forcing them to take poor students in 25% of available seats. It is really quite an abysmal prospect. Fortunately the bill has not yet been passed and hopefully it doesn't.
Some interesting education reform ideas might be found here:
http://ccsindia.org/edu_policy.asp
I am personally associated with the Centre for Civil Society.
Posted by: Gautam at Jan 4, 2006 10:34:17 AM
Bharath M :
The private education sector may lack a government-funded accountability, but nothing to say that it lacks accountability overall in the long run. Private engineering colleges themselves have their own hierarchy of reputation and encouraging competition among them is what keeps raising the standards.
How then can you explain why most of the best and top ranked colleges in the US are private institutions?
Putting up too many regulations and standards is only going to make the situation something like 'cakes or nothing' to the majority of the under-educated. You have to let things go and trust that people will make rational choices and eventually standards will evolve rather than be designed. Assuming the (monopolistic)government has a better idea of what standards to inflict than people in the businesses itself is arrogant and seems like blind faith.
I can only speak for myself, but I don't assume the government is made up of angels any more angelic than the common man.
As for the IIPM case, it is rather a case of 'false propaganda' than accountability. If not for the private unregulated media (i.e. blogs) the issue would NEVER have been exposed.
Posted by: Abhinay at Jan 4, 2006 11:48:20 AM
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