IDEAS home Printed from https://ideas.repec.org/p/ioe/clabwp/8.html
   My bibliography  Save this paper

The Political Economy of School Size: Evidence from Chilean Rural Counties

Author

Listed:
  • Francisco Gallego

    () (Instituto de Economía. Pontificia Universidad Católica de Chile.)

  • Carlos Rodríguez

    () (Instituto de Economía. Pontificia Universidad Católica de Chile.)

  • Enzo Sauma

Abstract

Public schools in Chile receive a per-student subsidy depending on enrollment, and are managed by local governments that operate under soft budget constraints. In this paper, we study the effects of this system on per-student expenditures. Per-student expenditures on rural areas are 30% higher than in urban areas. We find that about 75% of this difference is due to the fact that rural public schools are significantly smaller and thus do not benefit from economies of scale. Besides, we also show that in our preferred estimates about 50% of the students in rural areas could be moved to schools that could exploit economies of scale – i.e., these students could attend bigger schools traveling at most an hour day a day in total. We show that even if we use conservative average speed rates or control for transportation, utility and infrastructure costs, there is a sizeable share of students that could be consolidated. We argue that local governments that have soft budget constraints do not consolidate these schools giving the existing potential because of political factors: closing schools is harmful for mayors in electoral terms. Consistent with this claim, we find that a decrease in the degree of political competition in areas with better access to non-voucher transfers from the central government (i.e. with softer budget constraints) decreases the extent of the inefficiency.

Suggested Citation

  • Francisco Gallego & Carlos Rodríguez & Enzo Sauma, 2010. "The Political Economy of School Size: Evidence from Chilean Rural Counties," Working Papers ClioLab 8, EH Clio Lab. Instituto de Economía. Pontificia Universidad Católica de Chile.
  • Handle: RePEc:ioe:clabwp:8
    as

    Download full text from publisher

    File URL: http://cliolab.economia.uc.cl/docs/wp/wp_08.pdf
    Download Restriction: no

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ioe:clabwp:8. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jaime Casassus). General contact details of provider: http://edirc.repec.org/data/iepuccl.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.