What Determines the Household Spending on Engineering Education? an Empirical Study of Delhi, India

In early 1960s, public funding and philanthropic contributions for higher education were the major part of the resource to this sector in India and the contribution from private sources in terms of tuition fee and other payments from students were negligible. With the implementation of the New Economic Policy of 1991, broadly known as Structural Adjustment Programme (SAP), the trend shifted towards private funding of higher education. This is in line with the recommendations of the World Bank and some development experts for the supplementation of public higher education revenues by non-governmental sources, primarily from the users i.e. students. The available studies in the domain of household expenditure on education in India have largely focused on school education, ignoring the higher and technical education. Furthermore, there are relatively few studies that have examined the potential factors that determine the amount of money spent by the households on higher education of their children. We have not come across any study that has examined the pattern and determinants of household expenditure on engineering education in India, though some have focused on the trends and changing patterns of public financing of technical education. The importance of undertaking studies on household expenditure in higher and technical education in India also lies in the fact that in present times, public budget for education in general and higher and technical education in particular is shrinking and the household's contribution is being looked at as the substitute to it.  Therefore, it is imperative for the government and other stakeholders involved in the education sector to be aware of the different factors that determine the level of household spending on higher and technical education. In this context, This paper examines the variability of household investment on engineering education in India and its relationship with individual, household and institutional factors using data collected through a student survey in Delhi, India, in 2009-10. The findings suggest that per child households have spent around one-third of their annual income on pursuing a graduate-level engineering degree. Also, students enrolled in private engineering institutions have spent more than the students enrolled in public-funded institutions. Interestingly, this difference is not only due to the difference in the payment of fees, as expected, but also in other expenses such as accommodation, food, transport, textbooks and study material. Households belonging to low socioeconomic settings (such as the scheduled castes and Muslims) have invested less on their ward’s engineering education than the households with better socioeconomic set-up (particularly forward castes and Hindus). Annual average household expenditure is observed to be higher for students interested in undertaking postgraduate study and beyond, compared to the students who do not wish to pursue further education after their undergraduate degree. This study is a modest attempt to fill this gap to some extent and seeks to provide insights into the study of the costs and financing of engineering education in India from a policy perspective.