Increasing quality and equity in education: The case of Chile

One of the most important questions confronting education policy makers is whether the efficiency of the education system could be improved by introducing some degree of competition into the supply of education services. Friedman (1955) argued that private schools are inherently more efficient than publicly operated schools, and advocated a competitive system of publicly funded student vouchers with the expectation that parents choice will favor private schools and public schools will have to compete by increasing quality.; As many other countries in Latin America, Chile's ongoing education reform (that started in the early eighties) is aimed at improving the quality and equity of education in the public sector. In its desire to improve quality by reducing inefficiencies derived from the bureaucratic nature of the central government administration, it decentralized the education administration by transferring school management from the central government to the municipalities. Additionally, it established a voucher program similar in spirit to Fiedman's "ideal" system. In particular, under the Chilean system parents can send their children to public schools, or to private schools that agree to take a voucher as full payment for the cost of education.; The legacy of the reform is a tripartite education system, consisting of municipal schools which receive central government financing (subvention) and are administered by municipalities, private schools which receive the same central government subsidy and are administered privately, and privately financed, privately managed schools. The share of enrollment in the third type of schools has remained around 8--10%, while the share of public school enrollment shrunk with the implementation of the voucher-type program from around 90% to 65% in the late 90's. Most of the students that moved out of the public schools and into the new private schools came from less disadvantaged areas, leaving the public schools with a higher proportion of the students that are most difficult to educate.; Chile constitutes and excellent case of analysis because of this policy experience in a context of universal primary and secondary education. In addition school tests have become a standard practice. Good disaggregated data by schools on test results and characteristics of establishments is available and periodic household surveys allow the identification of family characteristics of the students.; The study undertaken by this researcher is based on disaggregated data and incorporates the use of frontier econometric methodologies to avoid or at least, diminished statistical biases. (Abstract shortened by UMI.)...