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

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  • Chang-Tai Hsieh
  • Miguel Urquiola

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.

Suggested Citation

  • Chang-Tai Hsieh & Miguel Urquiola, 2003. "When Schools Compete, How Do They Compete? An Assessment of Chile's Nationwide School Voucher Program," NBER Working Papers 10008, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:10008
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    References listed on IDEAS

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    JEL classification:

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

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