Does private tuition crowd out private schooling? Evidence from India

The paper argues that private tuition to some extent crowds out private schooling. Ceteris paribus it compensates for the teaching quality deficiency in government schools. As long as the cost of private tuition is below a threshold, a household may prefer to send its child to a government school. Using the National Sample Survey 75th Round, 2017–18 data on education in India, we estimate a negative significant impact of the share of private tuition expenditure in monthly per capita expenditure of a household on government school enrolment of its child, who is in the 13–18 age group. With a lower cost of private tuition, the child is sent to a government school and private tuition, rather than to a private school. The result remains robust after controlling for district-level school-related variables. The paper also uses a theoretical model for explaining its empirical finding. The theory argues the empirical results derived in the paper provide hard-to-find evidence in support of the widely held view that on average the unaided private schools in India impart better teaching quality compared to the government schools. The results also help us to understand the likely impact of policies like the crackdown on private tuition as has happened in China recently on school choice and quality of education in a country.