Education premiums rise PDF Print E-mail
Saturday, 16 June 2018 00:00
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Yash's edit


The government is doing well to try and increase school enrolments with policies like the mid-day meal scheme, but while that is welcome, a bigger driver is the education-premium that parents and children perceive. Indeed, as the economy is getting more developed, the premium is rising—that also explains the rising clamour among various caste groups for getting reservations to good colleges across the country. Indeed, though government schooling is free, since private education is perceived as superior, the increase in the proportion of children in private schools in even rural areas is due to this education-premium.

According to an analysis of NSS data in Mint, those workers who have studied till middle school earned 36% more than those who had no formal schooling in 2011-12; those who had completed secondary schooling, in turn, earned 48% more than those who had studied just middle school. Graduates, in turn, earned 66% more than those who had just completed school or who had a diploma.Indeed, the education premium has changed in keeping with the demands of the economy. So, data from the 1999-2000 NSS shows that those who had completed middle school earned 56% more than those with no schooling—this premium fell to 36% in 2011-12 as the economy needed more workers with higher education. In 1999-2000, a college graduate earned 39% more than someone who had just completed her schooling—in 2011-12, this premium rose to 66%.


As a result of this, Mint reports a higher proportion of SC/ST/OBCs looking to get an education in comparison with the past. Data from the PRICE all-India survey for FY14 shows just how much each caste group benefits. In the case of STs, for instance, while an illiterate ST household earned Rs 69,316 per year, this rose to as much as Rs 288,841 in the case of a graduate ST household. Mint’s argument that SC/ST/OBC workers earn less than upper caste ones is correct, but misses the point. For one, for an ST household, the move from a Rs 69,316 salary to Rs 2,88,841 is probably more important than the fact that an upper caste graduate earns Rs 369,654. Two, while that difference appears unfair and evidence of discrimination, broad classifications like ‘graduate or above’ cannot take into account the difference in the courses studied, the quality of the colleges, and the proficiency in English.

Since access to top-quality education becomes critical and government-run colleges/universities are in short supply—caste-based reservations have also taken their toll—the government needs to create an environment that allows top-class private universities to flourish. While several universities have come up, government regulations and regulators like the UGC/AICTE are still a hurdle—sadly, despite the plan to liberalise the education sector, this has still not happened adequately.



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