The persistent effects of compulsory education in Baroda, 1901-2011

Literacy was extremely low in colonial India - by 1931, average gross literacy was about 8%. In comparison, the princely state of Baroda stood out by achieving an average literacy rate close to 18% in the same year. The ruler of Baroda introduced a set of policies in 1906 that included compulsory education and public provision of free, primary schools. We examine the short and long-run effects of this set of policies. We do this through a comparison of areas within Baroda with regions bordering them, using a difference-in-difference framework. Since administrative boundaries changed dramatically over this period, our long-run comparisons rely on a careful mapping of boundaries. We find large effects through the colonial period and in the decades immediately following independence. These differences eventually narrowed as public good provision expanded. In 2011, sixty-four years after independence, there still remained a gap in literacy rates in areas that were historically in Baroda, and those that were outside it.