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Determinants of Household Expenditure on Education in Rural India

Author

Listed:
  • Jandhyala B.G. Tilak

    (National Institute of Educational Planning and Administration)

Abstract

Using the NCAER survey data on Human Development in rural India (HDI) (1994), supplemented by other sources, the paper examines the extent of household expenditure on education by different groups of population, the elasticity of household expenditure on education to changes in household income on the one hand and government expenditure on education on the other and the determinants of family expenditures on education. It has been found that there is nothing like 'free' education in India. Household expenditures on education are sizeable; households from even lower socio-economic background—Scheduled Castes/Tribes, low income groups—all spend considerable amounts on acquiring education, including specifically elementary education, which is expected to be provided free to all by the State. Important items of household expenditures consist of books, uniforms and fees. Even in the case of government primary and upper primary schools, students seem to be paying huge amounts of fees—examination and other fees. It is also found that households do not discriminate much against spending on girls' education; substantial differences exist in household expenditures between expenditure on children attending government schools, government-aided schools and private schools. Among the determinants of household expenditures, household characteristics—particularly household income and the educational level of the head of the household -are found to be important. Other important determinants include demographic burden of the household (size of the household), caste and religion. Generally, gender is believed to be a very significant determinant of household expenditures on education. This is not necessarily true in all cases. School related variables chosen—the incentives such as mid-day meals, uniforms, textbooks and stationery, etc., and the availability of school within the habitation—are also quite important. Coefficients of elasticity clearly show that government expenditures and household expenditures do not substitute each other, instead they complement each other. So if the government wishes to mobilise household finances for education, it is important that the government increases its own allocation to education considerably. Conversely, and more clearly, if government budgets on education are reduced, household expenditures may also decline resulting in severe under investment in education.

Suggested Citation

  • Jandhyala B.G. Tilak, 2002. "Determinants of Household Expenditure on Education in Rural India," NCAER Working Papers 88, National Council of Applied Economic Research.
  • Handle: RePEc:nca:ncaerw:88
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    Citations

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    Cited by:

    1. Eric V. Edmonds & Nina Pavcnik & Petia Topalova, 2010. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 42-75, October.
    2. Reham Rizk & Hala Abou-Ali, 2016. "Out of Pocket Education Expenditure and Household Budget: Evidence from Arab Countries," Working Papers 996, Economic Research Forum, revised May 2016.
    3. Chi, Wei & Qian, Xiaoye, 2016. "Human capital investment in children: An empirical study of household child education expenditure in China, 2007 and 2011," China Economic Review, Elsevier, vol. 37(C), pages 52-65.
    4. Manik Kumar & Nicky Naincy, 2020. "Revisiting the Gender Gap in Private Household Expenditure on Education in India: An Empirical Analysis," Paradigm, , vol. 24(2), pages 164-176, December.
    5. Escobal, Javier & Flores, Eva, 2009. "Maternal Migration and Child Well-Being in Peru," MPRA Paper 56463, University Library of Munich, Germany.
    6. Reddy, A Amarender, 2013. "Rural transformation since 1970s in Dokur Village of Andhra Pradesh, India," MPRA Paper 30784, University Library of Munich, Germany, revised 30 Nov 2013.
    7. Amitava Saha, 2013. "An Assessment of Gender Discrimination in Household Expenditure on Education in India," Oxford Development Studies, Taylor & Francis Journals, vol. 41(2), pages 220-238, June.
    8. Ebaidalla, Ebaidalla M., 2018. "Understanding Household Education Expenditure in Sudan: Do Poor and Rural Households Spend Less on Education?," African Journal of Economic Review, African Journal of Economic Review, vol. 6(1), January.
    9. Jandhyala B.G. Tilak, 2002. "Elasticity of Household Expenditure on Education in Rural India," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 3(2), pages 217-226, September.
    10. Narayanan, Priya & Gopalakrishnan, Balagopal & Sahay, Arvind, 2020. "Understanding the government's attempt to transform attitudes towards a critical resource: Gold monetization in India," Resources Policy, Elsevier, vol. 66(C).
    11. Ebaidalla Mahjoub Ebaidalla, 2017. "Determinants of Household Education Expenditure in Sudan," Working Papers 1138, Economic Research Forum, revised 09 2003.
    12. Zimmermann, Laura V, 2012. "Remember When It Rained: The Elusiveness of Gender Discrimination in Indian School Enrollment," IZA Discussion Papers 6833, Institute of Labor Economics (IZA).
    13. Javier Escobal & Eva Flores, 2009. "Maternal Migration and Child Well-being in Peru(Migración materna y bienestar infantil en el Perú)," Documentos de Trabajo (Niños del Milenio-GRADE) ninosm56, Niños del Milenio (Young Lives).
    14. Humna Ahsan & Keith Blackburn, 2015. "Human capital and income distribution in a model of corruption," Centre for Growth and Business Cycle Research Discussion Paper Series 208, Economics, The University of Manchester.

    More about this item

    Keywords

    Family/Household Expenditure on Education; Government Expenditure on Education; Interstate Variations; Gender Differences; Discrimation;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • D1 - Microeconomics - - Household Behavior
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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