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Household expenditure on higher education in India: What do we know & What do recent data have to say?

S Chandrasekhar, P. Geetha Rani () and Soham Sahoo ()
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P. Geetha Rani: Department of Economics, Central University of Tamil Nadu

Authors registered in the RePEc Author Service: Geetha Rani Prakasam ()

Indira Gandhi Institute of Development Research, Mumbai Working Papers from Indira Gandhi Institute of Development Research, Mumbai, India

Abstract: We analyse data from two recent NSSO surveys to provide estimates of expenditure on higher education and loans availed for higher education. The average share of expenditure on higher education out of total household expenditure is 15.3 per cent and 18.4 per cent for rural and urban households who participate in higher education. This average is higher in the southern states since individuals from these states are more likely to be enrolled in private unaided institutions where fees are higher and are more likely to be pursuing technical education. For reasons similar to mentioned above, individuals from southern states are more likely to have outstanding borrowings for education. At the all India level, poorer households are less likely to borrow possibly because they are risk averse and uncertain about future returns. We do however find that individuals from lower quintiles of the distribution of consumption expenditure are more likely to get fee subsidies or scholarships, indicating that such schemes reach their intended beneficiaries. One metric that should be tracked at the policy level is the reliance on non-institutional source of finance and in particular money lender. In conclusion, we also highlight the need for additional research on the relative importance of credit constraints vis a vis employability in the decision to pursue higher education.

Keywords: Higher Education; Expenditure; Borrowing; India (search for similar items in EconPapers)
JEL-codes: I2 I23 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2016-12
New Economics Papers: this item is included in nep-agr and nep-edu
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Working Paper: Household Expenditure on Higher Education in India: What do we know & What do recent data have to say? (2017) Downloads
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