Private Investment in Education: Household Response to a Policy Change in English as a Second Language

English language, a lingua franca in the former British colony India, bears additional importance in labor market and generates skill premiums. Using a change in English Language policy in government schools as a source of exogenous variation, we study its impact on private investments in education in West Bengal, India. We find the likelihood of enrolling in private school is 4 percentage points higher on average for the affected cohort who could study English as a second language only from secondary grades. Preference for private schools is stronger among the economically better-off affected cohorts, who could substitute the almost free public schools. The ones who stayed back in government schools spend more on private coaching. While attempting to encourage higher participation of the disadvantaged, it may have inadvertently disincentivised public school enrollment among wealthier families, with considerable heterogeneity across gender and caste groups.