In the previous video
- the rise of private education in India
we showed the beginning in the 1990s
there was a massive increase in demand for education,
which was met by private schools.
So much so that now in India
27% of the primary age children are in private schools,
and in urban regions it is as high as almost 50%.
We also showed that on educational tests
the kids in private schools do better
than those in public schools.
But the question is: is this because the private schools are better
or is it because they draw from better students?
This is a question of cream skimming.
It's part of what I looked at in one of my papers,
and it's what we are going to talk about in this video.
Lots of papers have tried to control for cream skimming
using American data or data from other countries,
but they haven't always convinced the critics.
And the reason for this is that
when the private schools are just 10% of the market,
the kids in the private schools are
in fact very likely to be different
than the kids in the public schools.
With only 10% of the market,
It's easy to imagine that it's a different 10%,
it's the best 10%,
or a portion of it it's the best 10%
However, India offers a unique opportunity
to test for cream skimming,
because in many districts in India --
and these are just a few --
a majority of the kids are in private schools.
Well, if the majority of the kids
are in the private schools,
these kids must be much closer to average,
because they're the majority.
If the majority of the kids
are in the private schools,
they can't all be the cream.
That's the intuition,
let's look in a little more detail at a model.
Here's a simple model of cream skimming.
We are going to make 3 important assumptions:
First, there's some distribution of child ability -
some kids have higher ability than
do other kids.
Second, we're going to assume that
private schools offer no educational advantages.
Private schools do not increase ability or
testing level anymore than do public schools.
They are equal.
Now, given this assumption,
the average ability taken over all children,
whether they are in public schools
or in private schools,
will not vary with the private share.
Since private schools offer no advantages
over public schools,
as we increase the private share,
the mean over the entire population
will be absolutely fixed.
Third assumption, we're going to assume
that the private schools draw from
the top of the public school distribution
or draw to a greater extent from the top
of the public school distribution.
With these assumptions, when the
private share is low,
it's quite easy for the private mean
to be well above the public mean.
Simply because private schools draw
cream skim from the top
of the public distribution.
Notice however that as the private share
increases, the private mean must fall and
get closer and closer to the population mean.
Similarly, since the private schools are
drawing from the top of the public distribution,
the public mean must fall lower and lower
as the private share increases.
Okay, here's a second model of education:
The Higher Productivity Model.
In this model, we assume that the private
schools are better than the public schools.
They actually raise educational quality
and achievements.
We're also going to assume that the private
schools pull randomly from the public schools
So, there's no cream skimming going on
in this model.
What this means is that when the
private share of education is low,
the population mean is close to
the the public mean.
As the private share increases however, and
as we get more and more kids entering the
better schools, you get an increase in the
population mean until as you get almost
everybody in the private schools, the
population mean is equal to the private mean.
Key here is that as you increase the private
share, you get more and more kids in the
higher productivity schools so the
population mean increases.
Okay, what do the data say?
Remember, the cream skimming model says
that as the private share of schooling
increases, you're just changing how the
children are distributed, so there should be
no change in the mean score.
The higher productivity model says that as
the private share increases, you want to see
an increase as you get more and more
children into the private sector, where the
educational quality is higher.
So what we see for reading scores is that
as the private share increases,
the mean reading score increases,
suggesting higher productivity.
Notice, we do not see any big changes in the
scores in the publics schools. We see a slight
decline in the scores in the private schools,
suggesting that a little bit of cream skimming
may be going on; nevertheless, we see
increases in the mean, which does suggest
higher productivity.
Now this is just a crude look at the data,
let's take a closer look to see if we can
pinpoint where cream skimming might be
occurring, if it is occurring.
In this slide, we're showing the percentage
of children scoring at the highest reading
level in the private and in the public schools.
And what is very market here, is that as
the private share of schooling increases,
from about 0 to say 15%, we see a market
decline in the number of children in the
private schools scoring at the highest level.
So this suggested that cream skimming is
going on. When private share is really low,
When private share is really low, they
really are getting the best of the students.
As the private share increases, they are
getting lower and lower quality of students.
However, after about 10-15%, notice that this
level's off, and that we see no decline in
the private share and also no decline in the
public share.
So what this suggests is that there's a little
bit of cream skimming going on, when private
schools are small, but when the private
schools reach about 20% or so, they are
drawing randomly from the population
and they have greater achievement.
The private schools actually are increasing
educational quality.
I think this story makes a lot of sense.
When the private schools are small, of course
they draw from the cream,
but once the private schools are drawing from
over 20% of the population they're basically
drawing from the same pool as are the public
schools and what we see is that in the limit
there is an improvement in the reading quality
of the kids.
Same is also true from mathematics,
by the way.
So if you go back to the previous video:
The Rise of Private Education in India,
you'll see that the achievements level of the
kids in private schools are much higher than
those in the public schools.
What we've seen now is that some of this
difference is due to cream skimming, but
a modest, nevertheless, a significant amount
is also due to the higher productivity in the
private schools.
And indeed, that shouldn't be surprising
after all the private schools have lower
absentee rates.
If teachers who are actually
in the classroom teaching
more often, so it makes sense
that there would be some difference.
How much is this difference?
Well like I said, this difference is
modest but significant.
So switching children to private
schools, would increase
by 11.8 percentage points,
or 38.5 percent the number
of children who can read at the very highest testing level.
Looking at the bottom side,
it would decrease, switching kids
into the private schools, would
decrease by about 5 percentage points, or 55%,
the number of children performing
at the lowest tested levels.
The same thing is true
for arithmetic, look at the paper for
details, but basically switching the kids
to the private schools would increase
by 30% the number of children who
can do arithmetic at the highest tested
level. And it would decrease by 26% the number of children performing
at the lowest arithmetic level.
Okay, let's put these results in context
The Indian population is very young
370 million people, or 32% of the population below the age of 15
What that means is that there are about
100 million children being education in
private schools
In fact, this is the largest experiment
in private education, probably since 19th century Great Britain.
So how's the experiment going?
Well, what my paper suggests, as well as others,
is that private schools improve educational performance
modestly, but significantly.
Even if they don't improve education
performance, even if they're just as good
as the government schools, they're considerably cheaper, so that's
a big advantage.
Despite the fact, or perhaps because of the fact that this experiment
in private education, which happened spontaneously,
which happened from the ground up,
was NOT driven by government policy
was a response of the people,
was a response of entrepreneurs and
the people for a demand for education
despite the fact that this has gone well,
the Right to Education Act of 2009
may threaten this experiment.
The Right to Education Act imposes
conditions on the private schools
many of which do not apply to the
public schools.
We'll have to see what happens in the future.
Here's some further reading.
My paper of course, I mentioned James Tooley before and his co-authors
and I've also mentioned Nindan Nilekani's book before.
I should also point out that not everybody finds that private education
raises achievement levels. There's a paper by
Chudgar and Quin, they find that
private and public schools are about the same,
once you control selection factors
I actually find this somewhat difficult to believe
since we do know that the private schools do have much lower absentee rates
the public schools have much higher absentee rates.
Nevertheless, they find once you
control for other factors,
achievement levels are about the same
However, the private schools are much cheaper than the public schools.
So when a productivity advantage
that would still go to the private schools
Kingdon finds, as I do, that the private
schools in India have a higher
quality and efficiency.
Thanks very much.