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When does Inter-School Competition Matter? Evidence from the Chilean 'Voucher' System

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  • Francisco Gallego

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

Abstract

I investigate the effects of voucher-school competition on educational outcomes. I test whether voucher-school competition 1) improves student outcomes and 2) has stronger effects when public schools face a hard budget constraint. Since both voucher school competition and the degree of hardness of the budget constraint for public schools are endogenous to public school quality, I exploit (i) the interaction of the number of Catholic priests in 1950 and the institution of the voucher system in Chile in 1981 as a potentially exogenous determinant of the supply of voucher schools and (ii) a particular feature of the electoral system that affects the identity of the mayors of different counties (who manage public schools) as a source of exogenous variation in the degree of hardness of the public schools budget constraints. Using this information, I fnd that: 1) an increase of one standard deviation of the ratio of voucher-to-public schools increases tests scores by just around 0.10 standard deviations; and 2) the effects are significantly bigger for public schools facing more binding minimum enrollment levels.

Suggested Citation

  • Francisco Gallego, 2012. "When does Inter-School Competition Matter? Evidence from the Chilean 'Voucher' System," Documentos de Trabajo 429, Instituto de Economia. Pontificia Universidad Católica de Chile..
  • Handle: RePEc:ioe:doctra:429
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    References listed on IDEAS

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    1. David Card & Martin D. Dooley & A. Abigail Payne, 2010. "School Competition and Efficiency with Publicly Funded Catholic Schools," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 150-176, October.
    2. Pablo González & Alejandra Mizala & Pilar Romaguera, 2002. "Recursos diferenciados a la educación subvencionada en Chile," Documentos de Trabajo 150, Centro de Economía Aplicada, Universidad de Chile.
    3. Caroline M. Hoxby, 2000. "Does Competition among Public Schools Benefit Students and Taxpayers?," American Economic Review, American Economic Association, vol. 90(5), pages 1209-1238, December.
    4. Francisco Gallego & Andrés Hernando, 2009. "School Choice in Chile: Looking at the Demand Side," Documentos de Trabajo 356, Instituto de Economia. Pontificia Universidad Católica de Chile..
    5. Raimundo Soto & Arístides Torche, 2004. "Spatial Inequality, Migration and Economic Growth in Chile," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 41(124), pages 401-424.
    6. Ferreyra, Maria Marta & Liang, Pierre Jinghong, 2012. "Information asymmetry and equilibrium monitoring in education," Journal of Public Economics, Elsevier, vol. 96(1), pages 237-254.
    7. McMillan, Robert, 2005. "Erratum to "Competition, incentives, and public school productivity"," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 1133-1154, June.
    8. Claudio Sapelli, 2003. "The Chilean Voucher System: Some New Results and Research Challenges," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 40(121), pages 530-538.
    9. Alejandra Mizala & Pilar Romaguera, 2004. "Teachers’ Salary Structure and Incentives in Chile," Documentos de Trabajo 193, Centro de Economía Aplicada, Universidad de Chile.
    10. Francisco A. Gallego & Andres E. Hernando, 2008. "On the Determinants and Implications of School Choice: Semi-Structural Simulations for Chile," ECONOMIA JOURNAL, THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION - LACEA, vol. 0(Fall 2008), pages 197-244, August.
    11. Claudio Sapelli & Bernardita Vial, 2002. "The Performance of Private and Public Schools in the Chilean Voucher System," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 39(118), pages 423-454.
    12. Caroline Minter Hoxby, 1994. "Do Private Schools Provide Competition for Public Schools?," NBER Working Papers 4978, National Bureau of Economic Research, Inc.
    13. 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.
    14. Matías Tapia, 2010. "Competition, Incentives, and the Distribution of Investments in Private School Markets," Documentos de Trabajo 387, Instituto de Economia. Pontificia Universidad Católica de Chile..
    15. Sandstrom, F. Mikael & Bergstrom, Fredrik, 2005. "School vouchers in practice: competition will not hurt you," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 351-380, February.
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    17. Francisco Gallego, 2010. "The Political Economy of School Size: Evidence from Chilean Rural Areas," Documentos de Trabajo 375, Instituto de Economia. Pontificia Universidad Católica de Chile..
    18. Caroline M. Hoxby, 2007. "Does Competition Among Public Schools Benefit Students and Taxpayers? Reply," American Economic Review, American Economic Association, vol. 97(5), pages 2038-2055, December.
    19. Francisco A. Gallego, 2004. "School Choice, Incentives, and Academic Outcomes: Evidence from Chile," Econometric Society 2004 Latin American Meetings 39, Econometric Society.
    20. Patrick Bayer & Robert McMillan, 2005. "Choice and Competition in Local Education Markets," NBER Working Papers 11802, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Marika Santoro, 2015. "Long-term Gain, Short-Term Pain; Assessing the Potential Impact of Structural Reforms in Chile," IMF Working Papers 15/282, International Monetary Fund.
    2. Benjamin Feigenberg & Steven Rivkin & Rui Yan, 2017. "Illusory Gains from Chile's Targeted School Voucher Experiment," NBER Working Papers 23178, National Bureau of Economic Research, Inc.
    3. Cáceres-Delpiano, Julio & Giolito, Eugenio P., 2018. "Minimum Age Requirements and the Impact of School Choice," IZA Discussion Papers 11420, Institute for the Study of Labor (IZA).

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