School Performance Evaluation under the Voucher System: the Case of Chile

Education plays an important role in the economic and social development of countries. Myriad studies show that education is one of the best ways to offer increased socioeconomic opportunities, social mobility and wages. Not only is universal education important but more significant is the quality of the education. In an attempt to offer higher-quality educational options, Chile has introduced a voucher system. Vouchers are simply the induction of incentives as market forces into education to improve educational results. Introducing these incentives creates competition in student recruitment, directly influenced by the academic results of the school – ideally allowing only those institutions with good results to survive “in the market” and closing those schools that cannot “compete” against higher quality establishments. Unfortunately, sufficient data do not yet exist to fully endorse the claim that vouchers impact “the market” in this form. This study will use the empirical evidence that the Chilean case provides and try to determine if this voucher system works as the free-market theory claims.