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When Schools Compete, How Do They Compete? An Assessment of Chile's Nationwide School Voucher Program

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Author Info
Chang-Tai Hsieh
Miguel Urquiola

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Abstract

In 1981, Chile introduced nationwide school choice by providing vouchers to any student wishing to attend private school. As a result, more than 1,000 private schools entered the market, and the private enrollment rate increased by 20 percentage points, with greater impacts in larger, more urban, and wealthier communities. We use this differential impact to measure the effects of unrestricted choice on educational outcomes. Using panel data for about 150 municipalities, we find no evidence that choice improved average educational outcomes as measured by test scores, repetition rates, and years of schooling. However, we find evidence that the voucher program led to increased sorting, as the best' public school students left for the private sector.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10008.

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Date of creation: Oct 2003
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Handle: RePEc:nbr:nberwo:10008

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I2 - Health, Education, and Welfare - - Education
L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Krueger, Alan B. & Zhu, Pei, 2002. "Another Look at the New York City School Voucher Experiment," IZA Discussion Papers 663, Institute for the Study of Labor (IZA). [Downloadable!]
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  2. Derek Neal, 2002. "How Vouchers Could Change the Market for Education," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 25-44, Fall. [Downloadable!] (restricted)
  3. Caroline M. Hoxby, 2002. "School Choice and School Productivity (or Could School Choice be a Tide that Lifts All Boats?)," NBER Working Papers 8873, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Joshua Angrist & Eric Bettinger & Eric Bloom & Elizabeth King & Michael Kremer, 2002. "Vouchers for Private Schooling in Colombia: Evidence from a Randomized Natural Experiment," Natural Field Experiments 0004, The Field Experiments Website. [Downloadable!]
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  5. Dee, Thomas S., 1998. "Competition and the quality of public schools," Economics of Education Review, Elsevier, vol. 17(4), pages 419-427, October. [Downloadable!] (restricted)
  6. Cecilia Elena Rouse, 1998. "Private School Vouchers And Student Achievement: An Evaluation Of The Milwaukee Parental Choice Program," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 553-602, May. [Downloadable!] (restricted)
  7. Caroline Minter Hoxby, 1994. "Do Private Schools Provide Competition for Public Schools?," NBER Working Papers 4978, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Bettinger, Eric P., 2005. "The effect of charter schools on charter students and public schools," Economics of Education Review, Elsevier, vol. 24(2), pages 133-147, April. [Downloadable!] (restricted)
  9. Patrick J. McEwan, 2001. "The Effectiveness of Public, Catholic, and Non-Religious Private Schools in Chile’s Voucher System," Education Economics, Taylor and Francis Journals, vol. 9(2), pages 103-128, August. [Downloadable!] (restricted)
  10. Manski, Charles F., 1992. "Educational choice (vouchers) and social mobility," Economics of Education Review, Elsevier, vol. 11(4), pages 351-369, December. [Downloadable!] (restricted)
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  11. Jesse M. Rothstein, 2006. "Good Principals or Good Peers? Parental Valuation of School Characteristics, Tiebout Equilibrium, and the Incentive Effects of Competition among Jurisdictions," American Economic Review, American Economic Association, vol. 96(4), pages 1333-1350, September. [Downloadable!]
  12. Helen F. Ladd, 2002. "School Vouchers: A Critical View," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 3-24, Fall. [Downloadable!] (restricted)
  13. Julie Berry Cullen & Brian Jacob & Steven Levitt, 2000. "The Impact of School Choice on Student Outcomes: An Analysis of the Chicago Public Schools," NBER Working Papers 7888, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  14. Caroline Minter Hoxby, 2003. "School Choice and School Productivity. Could School Choice Be a Tide that Lifts All Boats?," NBER Chapters, in: The Economics of School Choice, pages 287-342 National Bureau of Economic Research, Inc. [Downloadable!]
  15. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March. [Downloadable!] (restricted)
  16. Couch, Jim F & Shughart, William F, II & Williams, Al L, 1993. " Private School Enrollment and Public School Performance," Public Choice, Springer, vol. 76(4), pages 301-12, August.
  17. Dennis Epple & Richard Romano, 2002. "Educational Vouchers and Cream Skimming," NBER Working Papers 9354, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  18. Andrea Tokman Ramos, 2002. "Is Private Education Better? Evidence from Chile," Working Papers Central Bank of Chile 147, Central Bank of Chile. [Downloadable!]
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