Investing in education: The impact of scholarships on school attendance in India

Abstract

In this study, we examine the impact of school-level scholarship provision on student absenteeism in India, focusing on children aged 6–16 currently enrolled in public schools. Using nationally representative data from the Indian Human Development Surveys (IHDS) rounds I (2004–05) and II (2011–12), we employ a quasi-experimental approach to assess the effect of scholarships on school absenteeism. Our findings reveal that full scholarship provisions in public schools lead to a nearly 35 % reduction in absenteeism. Heterogeneity analysis further shows that scholarships are particularly effective in reducing absenteeism among girls, students from minority communities, and those from low-income families. We also find that scholarships decrease the time spent on private tuition, suggesting that financial support may improve overall educational outcomes by reducing dependence on external tutoring. These findings highlight the potential of scholarships to alleviate financial burdens and encourage regular school attendance. Policymakers should consider implementing similar financial incentives, particularly targeting students from disadvantaged backgrounds with high absenteeism rates, to improve school attendance and educational completion.