This document discusses research on private versus public schooling in India. It notes that while public school teachers are better paid, private schools may have better incentives. The key policy question is whether private schools achieve better educational outcomes. However, it is difficult to identify causal effects due to selection bias, as more motivated families may choose private schools. The document explores various approaches and instrumental variables researchers have used to try and isolate the causal impact of private schools, including the presence of private schools, language instruction, social networks, and more. While the evidence generally seems favorable to private schools, the document notes more research is still needed to find a "smoking gun" and address concerns about external validity and sustainability.

1. Discussion of Private Schooling
in India
Abhijit V. Banerjee

2. An important policy question
• This paper takes on a key policy question—do
private schools work better than public schools?
• Very important both for determining the
regulatory stance of the government and for
deciding on voucher’s etc.
• And not obvious.
– Public school teachers are much better paid (often by
a factor of 4) and, as a result, might be better
educated and trained.
– On the other hand there is the now very well-known
problem of incentives in the public sector

3. A hard problem
• We cannot use judgment of parents: parents
have a hard time estimating the benefit of private
schooling for their child
– Zhang (2008) shows that parents in China queue up to
try to get their children into more expensive schools,
but except for the highest performing children
everyone actually does worse as a result.
• But then there is an identification problem
– Are children who are sent to private school more
motivated/gifted on average?
– Selection could operate within a family, within a
neighborhood, within a district

4. The eternal search for an instrument
• What we want is something that influences private school
participation but not performance
• Not easy to find--they use:
1. Presence of a private school: but don’t private schools
where education is a priority /where public schools are bad:
– could lead to upward bias because of prioritization
– Downward bias because bad public school quality.
2. Early English in Govt. school/English language instruction:
Does it vary at the State level? If so what determines where
you set up these special schools?
– Probably leads to upward bias.

5. More instruments
3. Social networks: Even they are skeptical
4. Mysterious “missing schedule”
5. Cook in government school:
– Very intriguing reduced form: villages where there is a
cook in the local government school systematically
under-perform other villages
– Worth investigating---is the school meal program actually
hurting children because parents value the wrong things
– We do not know the direction of bias: upward because
more privileged village or downward because more
backward village?
– Worth investigating government policy for allocating cook

6. Another approach: Family fixed effects
• Problem: who would you send to school if you
had to send one child to school?
• The good news is that the two approaches and
indeed the OLS, give very similar results.
– At least the family fixed effect and the IV approaches
use very different types of variation
• The effects are not small: .3-.4 standard
deviations is substantial by 1st world standards
though dwarfed by state effects.
• Probably will not convince the skeptics

7. What else can you do?
• Randomized trials: randomly allocate vouchers
– Angrist et al.
– However how do you deal with equilibrium
effects: what happens to school quality as
demand goes up?
– Kremer and Muralidharan try to deal with this by
randomly choosing voucher villages in AP
– They also randomly allocate vouchers, so will get
an estimate of the supply elasticity.
– But villages are also small….

8. Another approach
• In a number of papers Jishnu Das and his co-authors have
studied public versus private education in Pakistan
– As in India private education is much cheaper
• Their results make a strong case for private education
based on the following observation:
– In English, the difference between children in private and
government schools is twelve times as large as the difference
between children from poor and non-poor households after
controlling for observed differences between children.
– Put differently, a huge part of the variation in performance is
explained by school differences within the same village.
• Can un-observables do so much heavy lifting?
– Why do people with the same observables choose differently?
– What would be the effect of an information campaign?

9. Still it may be worth trying
• To see whether we see the same patterns in India
• How does the school effect within a village compare
with the effect of wealth?
• They do not present school effect regressions with
village fixed effect
• Wealth effects are hard to interpret because the scale
is not shown (and why are there 25% in the top
quintile)
• However the OLS effect of private school is the same
size as the OLS effect of college educated parents!
– (why are control effects in the IV identical to the OLS?)

10. On balance
• All the evidence looks favorable to private
education but there is no smoking gun..
• But even if we find the smoking gun we will
need to think about
– Whether this model (educated unemployed set up
schools for want of anything better to do) will
remain sustainable if growth continues?
– Whether this can be a means of delivering post
primary education?