Socio-economic inequalities in spending on various levels of education across Indian households: an update

The study examines potential channels of socio-economic inequalities in education expenditure by Indian households at three different levels of education using National Sample Survey Data (2018). Based on Heckman’s two-step model estimates, the inequalities are evident in the participation choice and education expenditure by social groups, place of residence and religious minorities for education up to the secondary level. Nevertheless, the economic status of the household is less critical. Gender inequality is more evident in the expenditure incurred than the enrollment choice at the secondary level. For education at higher secondary and above levels, the crucial channel of social inequality lies in choosing a subject specialization and subsequent expenditures. As per multinomial logit estimates, the choice of streams is highly selective, favoring those with the capacity and willingness to pay. The selection corrected expenditure based on Lee correction reveals the extent of socio-economic inequalities in education expenditures at these levels of education. The apparent disparity in participation choice and expenditure can only be addressed through calibrated policy interventions, especially at higher levels of education. Failing to resolve this may exacerbate inequalities in education and labor market participation.