On the Demand for Education in India

Abstract

In this dissertation I examine the impacts of market forces and government programs on households' demand for human capital in India. The first chapter examines the impact of ITES Centers on school enrollment using administrative enrollment data from three states in India, and finds that when these centers open, enrollment in primary school increases significantly. The effects are very localized, and using supplementary survey evidence we argue that this is driven by limited information diffusion. The second chapter introduces a simple model of human capital production which predicts that wages can negatively impact human capital under reasonable assumptions. Using data on test scores and schooling from rural India, we show that human capital investment is procyclical in early life (in utero to age 3) but then becomes countercyclical. We argue that, consistent with our model, this countercyclical effect is caused by families investing more time in schooling when outside options are worse. The final chapter applies the findings from this study to understand how workfare programs (a common anti-poverty strategy in the developing world) can impact school enrollment through their effects on wages. We examine the effect of the largest anti-poverty workfare program in world: NREGA in India. Using a fixed effects estimator, I show that the introduction of NREGA caused increases in child employment, and decreases in school enrollment, particularly among children ages 13-17.