A whopping 50%+ of secondary school students in India are educated in private schools. Are private schools increasing human capital or are they just skimming the best students? my paper, Private Education in India: A New Skimming Test makes a simple but revealing point:
… As the private sector’s share of enrollment increases, simple cream skimming becomes less plausible as an explanation for a higher pass rate in private schools. If private schools skim when they are at 10% of public school enrollment, how much cream can remain in the public school pool when private schools are at 60% of total enrollment? Thus, if this simple form of skimming is the explanation for the higher pass rate in private schools, one would expect the “private effect”, the difference between private and public scores, to be lower. in regions with high
part of private education.
In fact, what I find is that the private advantage, although greater in districts with smaller shares of private education (suggesting some skimming), stabilizes and does not disappear even when the share of private education is heading towards 100%. I also show that the average scores of all students, public and private, increase with the share of private education, which is inconsistent with creaming (which predicts a constant average). On the right is an image showing that private scores continue to exceed public scores, even in districts where private schools educate a majority or greater share of students.
In a new journal, Bagde, Epple and Taylor study 4 million students in thousands of villages in India between 2004 and 2014. In the early years of the study, none of the villages had private schools, but entry begins to occur in 2007- 2009 and the authors examine who goes to private schools. They find significant selection of higher income, higher castes, higher ability, and males toward private schools, but no evidence that public school students are harmed.
The authors wink at the possibility that stratification could cause problems down the line if it increases inequality, but they fail to mention the key point that, as with the arguments for skimming, stratification problems decrease as students are in private schools and disappear. if 100% of students are in private schools.
More generally, India is a pioneer in large-scale private education and the whole world should be watching for these innovations.
Addendum: See also my previous article on a key article by Muralidharan and Sundararaman, Private education in India: results of a randomized trial.