School choice in Chile: Markets, politics, and public policy

Expanding parental choice has risen to the top of the list of potential solutions to educational problems in countries on every continent. Whether such reforms are desirable is vigorously debated. Advocates have argued that, when voucher programs are successfully implemented, many benefits will flow from empowering parents to choose schools ranging from increasing satisfaction with schools to expanding the opportunities of the most disadvantaged students in the most segregated schools to improving the efficiency of schools. Critics have countered that vouchers increase the risk of exacerbating inequities. They maintain that disadvantaged parents do not have the time, ability or resources to make good choices and that profit maximizing schools will respond to the competitive pressures of vouchers by reducing effort and skimming off the highest performing students. Researchers can gain insight into this debate by examining school systems where vouchers have been implemented on a large scale and where private school supply has increased. In 1981, Chile began financing public and most private schools with vouchers.;This dissertation comprises three independent papers that analyze recent data on Chile's long-standing voucher program. The first paper develops a model of school behavior in a competitive marketplace, where parents choose whether or not to remain in their current school or change schools, using local schools to evaluate the performance of their child's school. The empirical evidence is consistent with the theoretical model. The results, however, are only significant for low-income and middle-class for-profit schools. The second paper explores a topic that has been a contentious issue in the policy debate in Chile: for-profit schooling. This paper compares the achievement of fourth and eighth-grade students across for-profit, non-profit, and public schools. The evidence challenges both sides of the ongoing debate. The third paper investigates the impact of school choice on segregation. The data indicate that public schools are more likely to serve disadvantaged students than private schools. The evidence also shows that the typical public school is more internally diverse with regard to ethnicity and socioeconomic status than the typical private school. While differential behavior is also found across private school types, the differences do not always comport with theory. The data also suggest that policies can either mitigate or exacerbate the stratifying effects of educational vouchers.