Compensating Policies for Small Schools and Regional Schooling Inequalities: Class Size and Multi-Grade Teaching in India

In an attempt to ensure universal enrollment, governments of many developing economies have adopted policies that provide schools even to relatively small communities. This has resulted in rising concerns that increased enrollments are being achieved at the cost of school quality and learning. One reason for this concern is that, on the demand side, small communities are generally associated with relatively remote regions, and are hence believed to be poorer, habited by households with lower levels of adult education. A second explanation is that, on the supply side, small schools generally necessitate multi-grade teaching, with a teacher simultaneously teaching students of different grades in a single classroom. To redress these disadvantages, most governments have adopted compensating policies that disproportionately allocate teachers to small schools. This paper examines whether this compensating policy redresses regional schooling inequalities by jointly estimating the effect of class size and multi-grade teaching on learning for students in third grade, using survey data from the state of Karnataka, India. We find that, rather than reducing inequalities, the policy enhances them. The reasons are two-fold: Multigrade instruction does not affect learning and the presumed positive relationship between school or village size and socio-economic status does not hold. Instead, in Karnataka and in many other Indian states, smaller villages enjoy higher levels of wealth. The Government’s policy therefore provides more resources to schools with initially higher learning levels, therefore increasing schooling inequalities.