Socioeconomic Challenges of Regional Inequality: DEA Evidence from the Education Sector

Education, being a merit good, must be accessible to each and every individual in the society. However, regional inequality in educational access and performance creates serious socioeconomic challenges, especially in the context of fiscal austerity policies adopted all over the globe. This paper evaluates interstate disparities in the efficiency of the education sector in India using a panel data envelopment analysis (DEA) framework. It employs constant returns to scale and variable returns to scale production technology frameworks to assess input-oriented and output-oriented technical efficiency of states’ education sectors over the period 2012-13 to 2021-22. The result highlights socioeconomic challenges owing to considerable disparity among states regarding efficiency under both the constant returns to scale (CRS) and variable returns to scale (VRS) frameworks. The large and populous states have performed at the bottom, while smaller states have enhanced their performances. This underscores the fact that regional inequality in the efficiency of the education sector of India is rooted in both managerial inefficiency and suboptimal scale of operation. The study provides dual policy suggestions for minimizing regional socioeconomic challenges in the education sector to tackle both input and output-oriented efficiency bottlenecks.