The Linkage between Household and Government Expenditure on Higher Education

Drawing on National Sample Survey unit level data (NSS 64th Round, 2007-08) on India, the article estimates coefficients of elasticity to examine two important questions on the nature of household expenditure on higher education in India – (a) whether households complement or substitute Government’s efforts in spending on higher education? and (b) how do households behave in spending on higher education, given a change in their levels of income. The results indicate that there is a complementary relationship between household and government expenditures on higher education; and that household expenditures respond favorably but less than proportionately to changes in household incomes. Further the study also shows that stipends or scholarships play pivotal role in households’ decision making regarding the resource allocation for higher education.