public vs. private educations

7/27/2019 Public vs. Private Educations

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Do Public Colleges in Developing Countries Provide Better

Education than Private ones?

Yona Rubinstein

Sheetal Sekhri

(Dec 2011)


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Quality of tertiary education is one of the primary determinants of the development levels of

a nation

Tertiary education levels vary by whether they are offered by public or private institutions

Within these levels, there are outcome differences between developed and developing countries

For the developed countries, private institutions are very popular and in many cases actually

better than their public counterparts

In developing countries, however, public universities are generally believed to be superior This is supported by widespread belief that private universities are more concerned with maximizing profits and

minimizing costs, rather than with providing quality education

In India, like in most other developed countries, public education is considered superior at

the tertiary level

The belief is substantiated by comparison of educational outcomes (distribution of earnings) of the two types of

institutions

However, this may not be due to causal effect of public universities, but just because of better students opting for

such colleges in the first place

The paper aims to unearth costs and benefits associated with public and private tertiary-level

education in India

Two variables are sought to be understood: a) whether public education produces better outcomes in India and b)

what, if any, is the additive effect of public over private tertiary level education

TERTIARY EDUCATION-PUBLIC VS. PRIVATE


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With the advent of economic reforms and the rise of the service sector, there has been a

noticeable rise in the demand for tertiary education in India

However, even with the surge in demand, less than a tenth of the college going population enrolls in tertiary

education

Public institutions in India are funded by the Government and are not allowed to accept

private donations

Instructors in these institutions are generally offered additional services such as tenure and stabilities which makes it

an attractive proposition

Private colleges charge over 5 times the public colleges and do not offer the same level of job

benefits to the instructors

Regulations in the country ensure that both public and private institutions take the same exit

tests, enabling a consistent comparison on that front

INSTITUTIONAL BACKGROUND


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In India, there is widespread debate on whether Government should foster entry of private

players in the education space

Proponents of the idea highlight the cost effectiveness strategy of the private level players,

indicating that this would eventually trickle down and help the students with lower burden of

education expenses

Critics of the idea, however, note that the focus on cost effectiveness may be at the expense

of providing high quality education, which would hurt the students and the economy in the

long run

While there has been considerable research in the field of tertiary education, none of them

have highlighted the differences between public and private institution impacts

The paper seeks to highlight that value added by public institutions has not been significant

Even high post college earnings are possible without significant value added by participating institutions

THEORETICAL FRAMEWORK


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The results and findings of the paper are based on the admission records and exam results offour education colleges (two public and two private) within a region in the country

There were 3,394 observations in the sample which excluded students admitted under reservation policies

Public college students fared better in the exit exams and private students, indicating clearly

that the outcomes were better for them

However, this might be due to higher academic ability of the students themselves, rather than due to value addition

from the institutions

DATA


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Overall, family background of the students were also compared to understand any differencein the intake criteria

The public schools have more affluent students

DATA

Variables Private Public Difference

Age 17.99 17.95

School Board XII 0.78 0.63 0.15

Senior Secondary score 58.55 70.07 -11.5

College exit exams 1378.73 1461.08 -82.35

Rural residence 0.124 0.086 0.038

Fathers Occupation

Agriculture 0.092 0.065 0.026

Business 0.42 0.37 0.05

Professional 0.054 0.041 0.012

Labor 0.032 0.039 -0.007


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As the bandwidth around the cut-off score decreases from 12 points to 8,4 and 1respectively, the difference in college exit score become insignificant

Difference in score is result of student characteristics rather than impact of college

EFFECT OF ATTENDING PUBLIC COLLEGES


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Cost effectiveness can be a factor to determine the efficiency of the colleges

The average cost-per-pupil per annum in the private colleges in the year 2006-2007 was

13,022 Indian Rupees whereas the average cost-per-pupil in the public colleges was 13,743

Indian Rupees

Risk possible was that the composition of reserved category students is overshadowing thevalue addition by the public colleges

The above risk assumption is found to be unfounded after the analysis of comparing reserved

category students and the private college students

ADDITIONAL FACTORS TO DIFFERENTIATE COLLEGES

public vs. private educations

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