The Effectiveness of Private Voucher Education

Abstract

In this article the authors analyze the effect of private voucher education on student academic performance using new data on Chilean students and a novel identification strategy. Most schools in Chile provide either primary or secondary education. The authors analyze the effect of private voucher education on students who are forced to enroll at a different school to attend secondary education once graduated from primary schooling—structural switches. Moreover, the data set the authors use in this article contains information on previous academic achievement and thus allows them to identify differences in students’ unobservable characteristics. Using a number of propensity-score-based econometric techniques and the changes-in-changes estimation method, the authors find that private voucher education leads to small, sometimes not statistically significant differences in academic performance. The estimated effect of private voucher education amounts to about 4% to 6% of one standard deviation in test scores. In contrast, the literature on Chile based on cross-sectional data had previously found positive effects of about 15% to 20% of one standard deviation.