Principal investigator: Eduarda Miller de Figueiredo
Authors: Joshua Angrist, Eric Bettinger, Erik Bloom, Elizabeth King and Michael Fremer
Location of the Intervention: Bogotá and Jamundi
Sample Size: 3.000
Sector: Education
Primary Variable of Interest: Educational Performance
Type of Intervention: Vouchers for Private Schools
Methodology: Experimental Evaluation
Summary
In developing countries, there is a high enrollment rate in private schools, unlike in developed countries, since in developing countries there is a perception that private schools function better than public schools. Through a demand-side financing program, PACES in Colombia grants vouchers to students to attend private schools in secondary education, provided they maintain good academic performance. Analyzing the impacts of vouchers on educational levels, the authors found that countries with weak public school infrastructure and a well-developed private education sector can benefit from school financing programs, increasing educational levels.
- Policy Problem
While in the United States enrollment in private schools is only 11% (US Department of Education, 1998), in developing countries this number is 2 or even 3 times higher (James, 1993). Problems with public schools are generally more severe in low-income countries, since the quality and integrity of public service delivery are correlated with income level (Rauch and Evans, 2000).
This idea that private schools perform better than public schools in the developing world has led governments in poor countries to experiment with funding programs, such as vouchers (Psacharopolous et al., 1986).
The article discussed here will present evidence on the impact of the school voucher program in Colombia, known as the Program for Expanding Secondary Education Coverage.[1].
- Implementation and Evaluation Context
Of Colombian children, 89% of primary school age were enrolled in school in 1993; however, only 75% of the eligible population was enrolled in secondary schools.[2]When considering the poorest quintile of the population, 78% were enrolled in primary school, but only 55% were enrolled in secondary school (Sanchez and Méndez, 1995). Furthermore, high repetition rates in Latin America are widely seen as symptoms of poorly functioning public schools.
PACES was established in late 1991 as part of an attempt to expand the private provision of public services, increase school capacity, and boost high school enrollment rates (King et al., 1997, 1998). This program provided vouchers to over 125.000 students, covering slightly more than half the cost of private school.
- Policy/Program Details
To qualify for a voucher, applicants had to be entering the 6th grade and be 15 years old or younger, and for voucher renewal, students had to maintain satisfactory academic performance – that is, they had to pass to the next grade.
The program focuses on low-income families, where applicants had to present a utility bill to prove their residential location and eligibility for the voucher. Furthermore, it was restricted to children attending public primary schools.
The maximum voucher value was initially set to correspond to the average monthly tuition fee for low- to medium-cost private schools in the three largest cities in Colombia. Over the years, the vouchers have become less generous as they have not kept pace with inflation, and as a result, beneficiaries have had to supplement their tuition fees with additional payments.
- Assessment Method
1.600 PACES applicants were interviewed, totaling around 3.000 interviews overall, stratified to obtain an approximately equal number of winners and losers (55% winners of the PACES lottery and 53% losers), and in the 1995 and 1997 cohorts of Bogotá and the 1993 cohort of Jamundi (suburb of Cali). The lottery was random within the localities and conditional on whether or not the families had access to a telephone.
Estimates of the lottery effects are based on a regression that includes as the dependent variable child i from the application cohort c (In addition to a vector of individual characteristics, an indicator of selection (or not) for the voucher and a cohort-candidate effect to control for the fact that the probability of winning varied by city and year.
A test was also conducted with children from the 1995 cohort in three neighborhoods of Bogotá, chosen because they had a relatively large number of winners and losers. The tests were administered in 1999, and participants were contacted by telephone, followed by a letter describing the purpose of the test. To encourage participation, snacks were offered at the test sites, a prize draw was held, and each student received $3 to $6 to cover travel costs. Of the 1.176 candidates surveyed in Bogotá in 1995, 473 were invited to take the test.
- Main results
The most immediate effect of the lottery was to increase the likelihood of receiving a scholarship to private schools. At the time the study was conducted, voucher winners were 51 percentage points more likely than losers to receive some type of scholarship (including non-PACES scholarships).
Some lottery winners also lost their voucher after repeating a grade (7%), while 5% switched to non-participating private schools. The effect of winning the PACES lottery on the likelihood of attending private school was even greater in the 7th grade, likely because losers were more likely to drop out of private school.
According to the authors, these results suggest that the decision between public and private school was sensitive to the variation in the price of private school induced by the program, while the decision to attend school was not. This is consistent with a model in which families most willing – or able – to pay for education attend private school; an intermediate group attends public school; and those least willing – or with the least ability – do not attend private school.
Furthermore, another finding is that the winners of this lottery completed their studies more often than the losers, and were less likely to repeat a grade. In addition, it was observed that there was no statistically significant effect on enrollment. For example, in the Bogotá sample for the year 1995, more than 20% of the losers had repeated a grade since the beginning of the 6th grade, and almost 20% repeated the 6th grade. But the probability of repeating a grade was reduced by 5 to 6 percentage points for those who won the lottery.
The results of tests administered in 1999 in Bogotá neighborhoods show that lottery winners scored slightly more than 0,2 standard deviations higher than losers. According to Cole et al. (1993), two-tenths of a standard deviation is approximately the score gain associated with an additional school year.
The impact of the vouchers can be explained through different channels. First, the winners of the lottery were more likely to attend participating private schools, and these schools were considered better than public schools. Second, the vouchers allowed students who would have attended private schools anyway to attend more expensive private schools. And third, the winners had an incentive to dedicate more effort to school for fear of losing the vouchers if they failed a grade.
- Lessons in Public Policy
The results demonstrate that the winners of the voucher lottery benefited from a higher level of education, which occurred mainly as a consequence of reduced grade repetition and higher test scores. This suggests that funding programs, such as PACES, can be a cost-effective way to improve educational performance in countries with weak public school infrastructure and a well-developed private education sector.
References
Angrist, Joshua, Eric Bettinger, Erik Bloom, Elizabeth King, and Michael Kremer. 2002. “Vouchers for Private Schooling in Colombia: Evidence from a Randomized Natural Experiment.” American Economic Review, 92 (5): 1535-1558.
[1] Secondary Education Coverage Expansion Program (PACES).
[2] Secondary school covers grades 6 through 11, which is when Colombian high school education ends.
