Evaluating a voucher system in Chile. Individual, family and school characteristics

Abstract

Private provision of education is a topic which has received a great deal of discussion around the world in recent years. Free choice of schools and a voucher system providing public funding to both private and public schools are in place in Chile and have been operating for twenty years. This article provides evidence on the educational determinants of access to higher education and social mobility. The study uses the Academic Aptitude Test (PAA) database, 1998. The PAA is an instrument designed to evaluate the abilities and knowledge of those students who have completed secondary education. This information is used to estimate educational production functions. Three categories of variables (inputs) are hypothesized as explaining educational achievement: individual, family, and school characteristics. The voucher system is “evaluated” by comparing the impact of different school types (privately paid, private subsidized (voucher), and public schools) on academic performance. The voucher system assumes the competition generated among schools will improve the quality of education. Evidence obtained by using OLS estimates indicates that attending a private subsidized school does increase standardized test scores, but the impact is relatively small. The voucher schools perform more akin to public than private schools. However, when TSLS models are estimated in order to control for school choice, the impact of attending a private subsidized school increases significantly. At the same time the impact of the parent’s education is reduced significantly. Therefore, parental characteristics operate in the selection of school type, and as such their impact has been overestimated with respect to the OLS model. Therefore, the Chilean voucher system succeeds as an instrument that provides social mobility. Policy makers should support a voucher system and increase its availability. Another relevant finding is that while female students are more likely to obtain better grades than their male counterparts during high school, their PAA test scores are significantly lower.