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Demand or Supply for Schooling in Rural India?

Demand or Supply for Schooling in Rural India?. Sripad Motiram Lars Osberg Department of Economics, Dalhousie University May 25, 2007 - Goa. Human Capital Investment in Rural India. Supply of Schooling Local school system availability and quality - a collective choice

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Demand or Supply for Schooling in Rural India?

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  1. Demand or Supply for Schooling in Rural India? Sripad Motiram Lars Osberg Department of Economics, Dalhousie University May 25, 2007 - Goa

  2. Human Capital Investment in Rural India • Supply of Schooling • Local school system availability and quality - a collective choice • Demand for Schooling by households • Individual choices must take local system as an exogenous constraint • Time is Major Input in Human Capital Investment • Allocate to market or non-market production, to leisure or to education ? • Which matters more – supply or demand ? • HK - crucial for speed and equity of development

  3. How much of inequality in human capital investment in rural India is explained by variation in quality of local schooling? How much is explained by the choices of households? • Indian Time Use Survey 1999 (ITUS) • Micro-data on school attendance & human capital investment time HKiofrural Indians 6-18 • All India School Education Survey (AISES) • State level data on school quality 2002 • Matched by geo-code by state • Probit estimates of school attendance • Selection bias regression models of HKi • Micro-Simulation of implications of: • No impact of Scheduled Caste / Tribe • No household income less than median • No household head less than high school + No household has all illiterate adult females • School quality ≥ Tamil Nadu • School quality & parental education crucial

  4. HKi = Si + Hi + TiInvestment time = class + travel + homework

  5. Micro-Simulations of the Impact of SC/ST, Parental Education, Income and Poor Quality Schools

  6. Human Capital Investment is crucial for pace and equity of economic growth • Caveats • District level geo-codes not yet used • more accurate, detailed modeling of local schools • Proof of causality? very hard in non-experimental life • cross-sectional correlations “are consistent with” • Inequality in HKiimplies inequality in incomes – but not the reverse • Small aggregate impacts of caste on HKi • Major determinants of attendance and HKi • Local school quality • Parental education • Lagged implication of collective school quality choice

  7. Time Use Data – an important new tool for development analysis • Poor people do not have money but they do have time • Data on market income & spending cannot reveal behaviour of children or many women or poor • Hence often ignored in empirical analysis • But everyone has 24 hours of time, every day – so excluded groups can be modelled with time use data • Crucial aspects of the development process largely occur outside the market economy – but do use time • Human Capital investment decisions • Social Capital formation & Basic Goods (Water) • Motiram and Osberg (2007) • Environmental Degradation & Deforestration • Time use micro-data can be linked to local social, economic and environmental variables to provide a detailed analysis of many crucial issues

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