India’s schooling system caters to ~250 million students from varying socio-economic backgrounds. Guided by considerations of expanding access and making education affordable, the government has set up schools across the country. Public schools account for over 68% of all schools in India. While students can enrol in such schools for free, the per-child cost incurred by the government imposes a significant burden on the exchequer.

Working concurrently with the public education system is a burgeoning network of private schools—accounting for 29% of all schools in India. Private schools cater to ~50% of students across the country (barring the period during the COVID-19 pandemic).

Despite the high expenditure the government incurs on these schools, students' learning outcomes tend to be poor. The UNESCO Global Education Monitoring Report 2022 finds that India has one of the lowest supporters for public provisioning of education among middle- and high-income countries.

While students in private schools tend to have better outcomes, a common criticism of such schools is that they only cater to highly motivated students from better socio-economic backgrounds. However, low-cost private schools account for 70%–85% of student enrolment in India’s most populated states making this argument untenable (Kingdon 2020; CSF 2020; Tabarrok 2011). Such schools expand access to education for low-income communities in urban and rural areas, with some schools charging as low as INR 2400- 6000 (~29-72 USD) per annum.

In a push for greater inclusivity, the Right to Education Act (RTE) 2009 (a Union law regulating schools) mandates private unaided schools to reserve 25% of their entry-level seats for students who belong to the Economically Weaker Sections (EWS) of the society. The tuition fee for such students is reimbursed to private schools at a rate lower than the actual amount charged by the school or per child expenditure incurred in government schools. Since the socio-economic background of EWS students is similar to that of students in government schools, testing their learning levels after they enrol in private schools will help evaluate the impact of private schools on learning outcomes.

The 25% reserved seats in private schools for which the government pays the schools directly has created the world’s largest voucher program. Parents of students from the EWS category fill out a standard application form to express their preference among neighbourhood private schools. A lottery decides which child gets admission to which private school. Consequently, in private schools, there are two types of students: (i) those who get admission through the 25% lottery and (ii) those who pay their fees, i.e., the non-EWS students.

This project aims to examine how private schools affect the learning outcomes of students. For this purpose, the project team will evaluate and compare the learning levels of students in five categories: (i) lottery winners who go to private schools, (ii) lottery losers who enrol in government schools, (iii) lottery losers who attend private schools but pay from their pocket, (iv) students who do not opt for lottery (non-EWS) and attend private schools by paying the fees, and (v) those who do not apply for the 25% lottery and go to government schools. The study will cover 10,000 such students across two cities in India. In addition, they will survey the parents of these children to capture their socio-economic status and satisfaction with schools.