Private coaching and the impact of the rural employment guarantee programme on it: Evidence from West Bengal, India Upasak Das December 2016

Introduction Sustainable Development Goals: Achieving universal access to quality education. Widespread literature on provision and access of education and its effects (Lóapez and Valdés, 2000; McCowan, 2007; Lewin 2009) One dimension of education that has been of importance is the choice and expenditure on private coaching

Private coaching: Fee-based tutoring that is given to provide supplementary instruction to students in academic subjects that they study in the mainstream academic system (Dang and Rogers, 2008) Malaysia, Japan, South Korea: Majority of the students in primary as well as middle and secondary level receive private coaching. Private coaching is more used by higher income households, residing in urban areas, studying in higher grades or appearing for competitive examinations, low achievers or studying in government schools (Baker et al. 2001, Glewee and Jayachandran, 2006, Glewwe & Kremer, 2006, Tansel and Bircan, 2006, Dang, 2007; Kim and Lee, 2010, Dongre and Tewary, 2014, Gangopadhyay and Sarkar 2014).

Objectives Impact of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) on educational expenditures on private coaching in parts of West Bengal If participation and extent of participation indicated by the number of days of work under MGNREGA and the earnings from it have an impact on the decision to send the children for private coaching and the expenditure incurred on it NOTE: More than 53% of the sampled households who worked in MGNREGA reported that the money received has been spent on private coaching for their children apart from food and clothing

MGNREGA The MGNREGA was passed by the Indian Parliament on 23rd August 2005 At least 100 days of guaranteed wage employment (unskilled work) in every financial year to every rural household at a statutory minimum wage. Welfare impacts Reducing poverty and enhancing welfare (Imbert & Papp, 2014; Klonner and Oldiges 2014) Reduction in short-term migration (Das, 2015) Empowerment of women (Khera and Nayak, 2009; Dev, 2011) Access to credit (Dey and Imai, 2015) Positive impact of female participation on educational outcomes (Afridi et al. 2016)

Private Coaching in India and West Bengal NSSO, 2014: About 25% of the students depend on private coaching At primary level, 23% of the male students and 20% female students opt for private coaching At higher levels, this increases to 38% and 35% for male and female students respectively Azam (2015): Private coaching is relatively inelastic at each levels of schooling and hence is considered as a necessary good in the household consumption basket West Bengal: More than 65% opt for private coaching. At higher levels, this is about 90%

Data Field survey conducted from January to April 2012 in two blocks of Cooch Behar district of West Bengal Two blocks- Haldibari Block and Cooch Behar-I block Haldibari block: Dakhin Bara Haldibari GP and Devanganj GP; Cooch Behar-I block: Dawaguri GP and Falimari GP 556 households were surveyed Questions of socio-economic and demographic characteristics; MGNREGA participation, private coaching expenditure (monthly).

Outcome and Primary Variables of Interest Children of 6 to 18 years. Outcome Variable: whether the child attends private coaching and expenditure incurred on it [Log (expenditure+1)] Primary Variables: Participation in MGNREGA in 2011 (any member got work)- binary. Log (number of days of work in MGNREGA in 2011 +1) Log (annual earnings from it +1) Controls: Age, gender, socio-economic, demographic factors.

Estimation Methodology Regression equation: if child, from household, in GP, is sent to private coaching, 0 otherwise/ expenditure incurred. and = child specific and household characteristics = household participation in MGNREGA

Omitted variable bias (Angrist and Pischke, 2009) OLS regression of participation/ extent of participation in MGNREGA. First stage regression: = vector of exogenous variables which affect participation in MGNREGA = the vector of instruments defined at GP level

Putting the residuals in the second stage regression Attendance in private coaching: probit regression Expenditure incurred: OLS and tobit regression Bootstrapping at the village level to correct for the standard errors If the coefficients of the residuals are found to be statistically significant at 1% or 5% level, the variable should be treated as endogenous (Ravallion and Wodon, 2000)

Instruments (i) A dummy to indicate if the GP is ruled by the Trinamool Congress (TMC) Government (ii) Expenditure incurred for unskilled workers at the GP level per 1000 households demanding work under MGNREGA and (iii) Number of MGNREGA staffs employed at the GP level in 2015-16

First stage regression Probit Tobit Working in MGNREGA Log of number of days worked Log of earnings Instrument Variables GP ruled by TMC -1.512*** -3.331*** -8.754*** (0.312) (0.610) (1.778) Number of MGNREGA staffs at GP level 0.490*** 1.267*** 2.990*** (0.110) (0.203) (0.576) Expenditure incurred per 1000 workers at GP level 0.173*** 0.498*** 1.115*** (0.049) (0.088) (0.252) Controls Yes N 387

Descriptive Statistics Over 52% of the children attends private coaching Variables Total No private coaching Attend private coaching Difference Expenditure on private coaching (in Rs.) 194.251 Participated in MGNREGA in 2011 (P) 0.494 0.489 0.499 -0.010 Number of days worked in MGNREGA (2011) 15.882 12.593 18.813 - 6.220* Annual income (2011) (in Rs.) 2100.376 1621.163 2527.447 - 906.284*

Regression Results (Participation) Going to tuition (Probit) Expenditure in tuition (OLS) Expenditure in tuition (Tobit) Without residual With residual Residuals -1.060* -2.475** -4.195** (0.579) (0.963) (1.655) Worked in MGNREGA 0.223* 1.283** 0.421** 2.896*** 0.760** 4.956*** (0.115) (0.570) (0.190) (0.945) (0.384) (1.657) Controls Yes GP fixed effects N 739

Regression Results (Number of working days) Going to tuition (Probit) Expenditure in tuition (OLS) Expenditure in tuition (Tobit) Without residual With residual Residuals -0.172 -0.440* -0.723* (0.137) (0.229) (0.394) Log of working days 0.109** 0.281** 0.194*** 0.635*** 0.362*** 1.085*** (0.045) (0.131) (0.075) (0.221) (0.135) (0.370) Controls Yes GP fixed effects N 739

Regression Results (Earnings) Going to tuition (Probit) Expenditure in tuition (OLS) Expenditure in tuition (Tobit) Without residual With residual Residuals -0.105 -0.250** -0.421** (0.065) (0.104) (0.180) Log of earnings 0.034** 0.139** 0.063** 0.313*** 0.115** 0.535*** (0.016) (0.063) (0.027) (0.101) (0.052) (0.174) Controls Yes GP fixed effects N 739

Local Polynomial Regression Plots

Qualitative Evidence An agricultural labourer from the Dawaguri GP Private coaching popular in Dawaguri GP- about 70% of the children attends it Households from GPs in the haldibari block

Conclusion Evidence of impact of MGNREGA in increasing the expenditure on education through private coaching Large welfare impacts through MGNREGA Glaring problems making MGNREGA less attractive (Mukhopadhyay et al., 2015, Narayanan et al. 2016) Need to address problems related to rationing of jobs and delayed payments Higher allocation of resources to the programme