Education, Openness and the Poor: Analysis of an All-India Sample of Households

This paper reports some new evidence from an all-India household survey on demand and supply issues in schooling. In India, most studies attribute poor educational performance to poverty. Though this factor is important, the recent survey evidence shows that lack of interest in schooling is the major factor explaining low enrolment and high dropout rates in India. This is because the present system does not guarantee the necessary expected future payoffs from education/learning. This paper argues that the solution to this problem lies in reorienting the educational sector to demand lead supply transformation by private financing or at the least dual financing of this sector.