Do Public Colleges in Developing Countries Provide Better Education than Private ones? Evidence from General Education Sector in India

Public college graduates in many developing countries outperform graduates of private ones on the college exit exams. This has often been attributed to the cutting edge education provided in public colleges. However, public colleges are highly subsidized, suggesting that the private-public education outcome gap might reflect the pre-determined quality of the students who sort into public colleges rather than the causal impact of the public tertiary education on students' outcomes. We evaluate the impact of public colleges using a newly assembled unique data set that links admission data with the educational outcomes on a set of common exit exams in India. Admission to general education public colleges is strictly based on the results of the Senior Secondary School examinations. We exploit this feature in a Regression Discontinuity Design, and find that the public colleges have no added value in the neighborhood of the admission cut off scores.