The case for cash, Exhibit 12

Lant Pritchett and Yamini Aiyarit further convince me on the merits of more cash and vouchers. Paraphrasing an email:

In India the government spends Rps 14,600 for a year of schooling, which is 80 percent of rural per capita consumption.

The average private sector school costs 6000.

And of course the government schools get substantially worse results.

Giving families the private school cost and the rest in cash could double each child’s food spending.

The last bit–would people be better off with cash–isn’t known for sure, but the evidence is building. I really think we ought to see massive policy experiments comparing public goods and services to cash, vouchers, or even a basic guaranteed income.

23 Responses

  1. Couple of comments. First a minor housekeeping issue. Yamini’s second name is Aiyar not Aiyarit. Second, the shocking part isn’t really just the cost per child. Studies show that what you get for government delivered education is much poorer than what you pay for in private schools (not really news). This is being further validated by a large number of poor families moving from free government to paid private schools in India. The phenomenon of Affordable private schools is telling in this regard. Although the real economic cost in some sense, needs to be captured by looking at the broad spectrum of “Private schools”.

  2. Couple of comments. First a minor housekeeping issue. Yamini’s second name is Aiyar not Aiyarit. Second, the shocking part isn’t really just the cost per child. Studies show that what you get for government delivered education is much poorer than what you pay for in private schools (not really news). This is being further validated by a large number of poor families moving from free government to paid private schools in India. The phenomenon of Affordable private schools is telling in this regard. Althoughthe real economic cost in some sense, needs to be captured by looking at the broad spectrum of “Private schools”.

  4. They should really talk about SES higher in the paper than they do, so they don’t seem to be ignoring it. They have quite a discussion about student selection effects but I’m not quite smart enough to follow it.

  5. I don’t think you’re gonna find a lot of people arguing that corruption is good for the people living under it. I have a hard time applying this lesson (which is, of course, universal) to a relatively non-corrupt situation.

    Finally, I’d like to see those public/private results controlled for SES, thx.

  6. A possible problem with this (I don’t know India but I taught in Kenya in 88) is that govt education spending goes to teachers who live in poor rural neighborhoods. So this money is a subsidy too.