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Public Gains, Private Strains: Public Investment and Private Schooling in Peru

Author

Listed:
  • Fagernäs, Sonja

    (University of Sussex)

  • de la Fuente Stevens, Diego

    (University of Sussex)

  • Pelkonen, Panu

    (University of Sussex)

  • del Pozo Segura, Juan Manuel

    (Pontificia Universidad Católica del Perú)

Abstract

In the 2010s, Peru experienced an increase in public educational investment, a substantial improvement in public school learning outcomes, and an erosion in the private sector learning premium. We use longitudinal, geo-coded register data on primary schools and pupils in urban areas to study how the improvement in public schooling affected private schools. With a difference in differences (DiD) framework, we demonstrate that the increase in public school quality reduced enrolment and test scores in private schools, primarily in areas with lower education levels. A staggered DiD analysis shows that new public school openings also reduced enrolment in nearby private schools.

Suggested Citation

  • Fagernäs, Sonja & de la Fuente Stevens, Diego & Pelkonen, Panu & del Pozo Segura, Juan Manuel, 2025. "Public Gains, Private Strains: Public Investment and Private Schooling in Peru," IZA Discussion Papers 18189, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp18189
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    Keywords

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    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I20 - Health, Education, and Welfare - - Education - - - General
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • N36 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Latin America; Caribbean

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