School competition and performance indicators: evidence from the creation of federal education institutions in Brazil

Abstract

The expansion of the Federal Institute of Education is characterized as an exogenous source of competition in Brazil. This research studies the effect of the Federal Institutes’ creation on the performance of the other public schools in the benefited municipalities. The methodological approach is the Propensity Score Matching combined with the generalized difference in differences method. The results show a significant and negative impact on the pass rate of students who remain in the state public educational system and a positive impact in the fail rate. The policy of expansion of the Federal Institutes may lead to a cream skimming process.