Can the Private Sector Deliver Education for Alll? Evidence from Indian Districts

Abstract

The present paper provides new evidence that private school growth is associated with both positive and negative externality effects respectively for literacy and enrolment rates in Indian districts. We exploit the district-level variation in the growth of new private schools over a period of time to show that districts with new private schools tend to have higher literacy and lower gender gap in literacy; but there is opposite effects for enrolment and gender gap in enrolment among 10-19 year olds: enrolment rates are lower, but gender gap in enrolment is higher especially among 10-14 year olds in the treated districts. We use difference-in-difference propensity score matching method to compare districts with and without new private schools over a period of time and argue that the opposite effects for gender gaps in literacy and enrolment can be attributed to the greater cost of enrolment vis-a-vis literacy in districts with new private schools in India.