ERIC BETTINGERSTANFORD UNIVERSITY

SCHOOL OF EDUCATION10 MAY 2010

Choice in International Contexts

School Choice and Vouchers Abroad

School Choice Takes Many Forms Abroad Educational Vouchers Contract Schools Open Enrollment Privately Financed Initiatives

Vouchers are More Integral to Many Educational Systems Abroad Than to the US National Voucher Systems in Chile, Sweden Targeted Voucher Programs

Means-Tested: Puerto Rico, Colombia Women: Bangladesh

International Literature is still in its infancy in many ways

International Evidence and the US

Design of School SystemsLimits to Generalizeability

Political Circumstances Institutions Funding Schemes

Role of Private SectorMotivation for Voucher Systems

Market Forces Equality of Opportunity Overcrowding Decentralization

Why Look Internationally?

Most Voucher Literature is From the USInternational programs are much larger than

in the US Chile, Bangladesh, Colombia

Long-run Equilibrium? Chile’s voucher program is now almost 30 years old

Existing funding systems and institutions may make vouchers more feasible

Many previous reviews: Neal (2002), West (1996), Zimmer and Bettinger (2008), Wößmann (2007)

Plan of Talk

1. Discuss Major Research Questions in Int’l Voucher Literature

2. Major Voucher Programs Chile Colombia

3. Effects of Vouchers on Voucher Users4. Effects of Vouchers on Overall System

Key Research Questions

1. How do Vouchers Affect Students Who Use Them?

Academic Outcomes Non-Academic Outcomes Heterogeneous Outcomes Cost Effectiveness Mechanisms?

2. How do Vouchers Affect the System as a Whole? School Entry and Exit Overall Attainment and Outcomes School Staffing Competition and Resource Loss

Why Study Voucher Users?

Policy relevance Motivation for many policies

Part of knowing overall impact of system Depends on size of system

Sheds light on other educational questions Effect of private schools Peer groups School Organization Cost Effectiveness

Overall Impact of the Voucher

Efficiency of Overall System Friedman (1955) Tiebout Competition (1956)

Alternative Explanations Resource Loss Limits on Competition Sorting

International Voucher Programs

Bangladesh Belize Canada Chile Colombia Guatemala Japan Lesotho The Netherlands New Zealand Poland Puerto Rico Sweden United Kingdom

Chilean Voucher Program

Part of Larger Decentralization Effort by Pinochet Government in 1980

All students were eligible Starting in 2008, “bonus” subsidy for admitting low-

income studentIncrease in Private Schooling

15% in 1981 to 42 percent in 2005Public, Voucher, and Private Non-Voucher

“Topping Off” Allowed in 1993Selective Admission Policies in Voucher

Schools

Attendance Across Sectors in Chile

Source: Bravo, Mukhopadhyay, and Todd (2009)

Colombia Voucher Program

From 1992 to 1997, Decentralization Effort by Colombian Government Goal to Improve Secondary School Enrollment

Means-Tested Focus on Students Entering Secondary School (Grade 6) Students Coming From Public Sector Covered About 144,000 Students

Admissions Students had to be admitted at a voucher school prior to

voucher application Vouchers assigned by lottery if oversubscribed

Voucher Value Declined over time from 100 to 50 percent

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Enrollment Rates in Colombia, 1993

Overall Rate

Rate for Poorest Quintile

Rate for Richest Quintile

Grade 1-5 enrollment/ Population aged 6-11

89 78 97

Grade 6-11 enrollment/Population aged 12-18

75 55 89

University enrollment/ Population aged 19-24

30 12 51

Source: Sanchez and Mendes, 1995

Effect on Users

Not clear what to expect Imagine that the voucher at least does no harm

Parents can always reverse decision However, “original” school may be altered by voucher

program

Raw correlations Colombia: voucher schools have similar outcomes to

public schools (King et al 1997) Chile: comparisons depend on types of covariates

included (McEwan and Carnoy 2000)Cleanest evidence to date is from Colombia

Uses randomization to identify the voucher

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Evidence from Colombia

Angrist, Bettinger, Bloom, King, Kremer (AER 2002) Surveyed Voucher Applicants from Bogotá 1995

Lottery Compared Voucher Lottery Winners and Losers Effects after Three Years

Angrist, Bettinger, and Kremer (AER 2006) Administrative Data on All Applicants Compared College Entrance Exam Scores

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Effects on Users: Colombia

Effects after 3 Years Increased Usage of Private Schools Higher Educational Attainment No Difference in Drop-out Rates Less Grade Repetition Higher Test Scores Less Incidence of Teen-age Employment

Long-Run Effects 30 percent of Voucher Applicants Take College Entrance

Exam Increase of 7 percentage points for Voucher Winners 25 Percent Relative Effect Impact on Test Scores

Users: Evidence from Chile

Hard to Interpret Counterfactual hard to identify New private schools and rapid entry into the market Were “control” students affected

Conclusion depends on Covariates Some Evidence of Positive Effects on Users (e.g.

Sappelli and Vial 2002) Evidence is Largely Mixed as to Whether

Vouchers Improve Outcomes (McEwan and Carnoy 2000)

Evidence on Users: Mechanisms

Randomization facilitates identification of “intent to treat” parameter in Colombia Does not help identify specific mechanisms

Possible mechanisms Private schools are better

But school quality was the same (King et al 1997) Peers are better

Bettinger, Kremer, and Saavedra (2008) examine vocational school applicants Winners “stuck” in vocational schools – peers are worse Winners outcomes are better despite worse peers

Voucher included incentives Students lost voucher if they failed. Alternative was labor force participation

Effect on Overall System

Competing Hypotheses Competition Resource Loss

Loss of money from enrollment depends on average versus marginal cost

Marginal cost of leavers is likely lower than average cost Inability to close public schools in Chile

Raw Correlation Positive relationship between degree of private

competition and outcomes (Wößmann 2009)Lack of pre-program data for Chile

Evidence on System: Chile

Hsieh and Urquiola (2006) Difference-in-Differences approach

Compare areas with significant increase in private school to those without

Average test scores do not rise Vouchers resort peers. Best students move to private

voucher schools. Some outcomes (e.g. grade repetition) are worse

Gallego (2005, 2007) Instrumental Variable approach

Uses stock of Catholic priests in 1980 as instrument Immediate expansion of parochial schools led overall

outcomes of all schools to improve

Evidence on System: Chile

Bravo, Mukhopadyay, and Todd (2009) Life-cycle model of earnings and schooling decisions Use labor force data for individuals educated before

and after the voucher reform Estimate impact of choosing private school Simulate what educational attainment would have

been in absence of the program. Positive impacts on educational attainment, high school

graduation, college attendance and graduation, and wages

Evidence on Systemic Effects: Other Countries

Sweden Comparisons based on penetration of private sector

Sandstrom and Bergstrom (2005): Positive effects on overall system

Value-added comparisons Ahlin (2003): Positive effects on overall system

Israel Open enrollment => Positive Effects Lavy (2006)

UK Relationship between degree of choice and outcomes

(Gibbons, Machin, and Silva 2008) Small, positive effects.

Evidence on Systemic Effects: India Experiment

Kremer and Muralidharan experiment Sample of communities who “might be eligible for

voucher study” Gathered applications

Matched randomization on which communities received voucher Comparisons between non-applicants across voucher and

non-voucher cities Within communities with vouchers, lotteries

determine voucher assignment Differences across users

Preliminary results positive on both accounts

Future Directions

Other Outcomes Parents choose schools for non-academic reasons

How do these outcomes vary? Wage impacts

Bravo et al (2009) is first study to explore

Cost Effectiveness Few studies so far Public expenditure on vouchers generally smaller

MechanismsStaffing issues

Summary

International Voucher Literature in Infancy Significant contributions in last few years

Effects on Users Positive Effects from Colombia Not clear on the mechanisms and the importance of the

voucher for the effects Chilean evidence is hard to interpret

Growing consensus of positive effects

Effects on System Positive Effects in Chile Comparisons of areas with and without voucher penetration More evidence arriving soon