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Taxation and educational development: Evidence from British India

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  • Chaudhary, Latika

Abstract

This paper measures the effects of public expenditures on literacy in early 20th century British India. Using a new dataset and an instrumental variables strategy, I find that public investments in primary education had positive and statistically significant effects on literacy. A 10 percent increase in 1911 per-capita spending or 44 additional primary schools would have translated into a 2.6Â percentage point increase in 1921 literacy in the population aged 15-20. The findings, however, differ by gender: the IV estimates on spending are statistically significant only for male literacy. India's historical experience thus suggests that building more schools would not have solved the problem of female illiteracy that continues to persist even today.

Suggested Citation

  • Chaudhary, Latika, 2010. "Taxation and educational development: Evidence from British India," Explorations in Economic History, Elsevier, vol. 47(3), pages 279-293, July.
  • Handle: RePEc:eee:exehis:v:47:y:2010:i:3:p:279-293
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    References listed on IDEAS

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    1. Abhijit Banerjee & Lakshmi Iyer, 2005. "History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," American Economic Review, American Economic Association, vol. 95(4), pages 1190-1213, September.
    2. Esther Duflo, 2001. "Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment," American Economic Review, American Economic Association, vol. 91(4), pages 795-813, September.
    3. Angrist, Joshua D. & Krueger, Alan B., 1999. "Empirical strategies in labor economics," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 23, pages 1277-1366 Elsevier.
    4. Caroline M. Hoxby, 2001. "All School Finance Equalizations are Not Created Equal," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1189-1231.
    5. Broadberry, Stephen & Gupta, Bishnupriya, 2010. "The historical roots of India's service-led development: A sectoral analysis of Anglo-Indian productivity differences, 1870-2000," Explorations in Economic History, Elsevier, vol. 47(3), pages 264-278, July.
    6. Chaudhary, Latika, 2009. "Determinants of Primary Schooling in British India," The Journal of Economic History, Cambridge University Press, vol. 69(01), pages 269-302, March.
    7. Geeta Gandhi Kingdon, 2007. "The progress of school education in India," Oxford Review of Economic Policy, Oxford University Press, vol. 23(2), pages 168-195, Summer.
    8. Dreze, Jean & Kingdon, Geeta Gandhi, 2001. "School Participation in Rural India," Review of Development Economics, Wiley Blackwell, vol. 5(1), pages 1-24, February.
    9. Geeta Gandhi Kingdon, 2007. "The progress of school education in India," Oxford Review of Economic Policy, Oxford University Press, vol. 23(2), pages 168-195, Summer.
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    Cited by:

    1. Oliver Vanden Eynde, 2016. "Military Service and Human Capital Accumulation: Evidence from Colonial Punjab," Journal of Human Resources, University of Wisconsin Press, vol. 51(4), pages 10031035-10.

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