Spending privately for education despite having a free public education policy: evidence from Sri Lankan household surveys

Compared to other neighbouring South Asian countries, Sri Lanka performs well in terms of education outcomes. Education is provided by the government for free from primary school level to the first-degree University level, yet households’ private education expenses are steadily increasing over time. Thus, this paper analyses trends and determinants of household private education expenditures using the country-wide micro-data from 1990 to 2013.,Using Household Income and Expenditure Survey (HIES) 1990/91, 2002 and 2012/13 data along with annual school census data, this paper examines the relationship between private education expenditure patterns and the observed changes of reported both demand-side and supply-side factors. In particular, the present paper analyses determinants of household private education expenditures within the two-part model econometric framework by taking into account location and time fixed-effects.,The results show that trend of spending privately for education is increasing over time with rising household income. Rural, Tamil and Islamic households and those headed by less-educated members are less likely to spend privately for education. The results also confirm that improved-supply-side factors can significantly lower the household burden arising from out-of-pocket education expenditure.,Unavailability of panel data and missing data on several districts due to security concerns are limitations of the study.,The trend of increasing private education expenses has implications on equity concerns of education in Sri Lanka, and it can undermine the purpose of free public education policy.,To our knowledge, this is the first study for Sri Lanka that examines patterns and determinants of private education expenditures using nationwide data for last two decades. This paper applies novel econometric techniques to account for various issues in household survey data analysis.,The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-07-2019-0445