Hope & Change in Chile

In light of education reform and comments made by Education Secretary Arne Duncan, CATO Institute’s policy analysis on Chile’s private school voucher program is a great respite from the political battles encircling states across America. CATO acknowledges both sides of the argument of whether private school voucher programs make a positive impact on education.

Chile, under the military regime in the 1980’s, decentralized (or privatized) national education and assigned those responsibilities to the municipal governments. As a result of this education reform package, the government introduced a flat per-pupil voucher program, where cities and private schools that did not charge tuition then received a per-student voucher for every child who went to their schools.

Now, approximately thirty years later, Chile’s education system is more privatized than ever before, with 48% of students enrolling in private voucher schools in 2009. Surprisingly, more than 70% of private voucher schools are not affiliated with a franchise, countering the charge that privatized education means less community involvement in a large private school corporation. The number of franchises in private voucher schools has decreased over the past few years, from about 35% in 2000 to about 29% in 2008. An interesting note is that most franchise schools are “more likely to belong to religious congregations or nondenominational foundations,” comprising 58% of the franchise compared to just 12% of independent schools.

CATO’s empirical results are rather interesting when it is broken down into simple, non-mathematical terminology. Chile’s fourth grade standardized test score, called SIMCE, and was used for the basis of CATO’s data collection and analysis. SICME assesses students in grades 4, 8, and 10 in subjects of language, mathematics, history, geography, and natural sciences. Parents and teacher questionnaires are complements to the student’s test, asking information related to socioeconomic background of the students, their families, peers, and the schools. Some of the primary independent variables for SICME were demographic-related, such as student’s gender, parent’s education, etc.

CATO discovered that franchised private schools with more than four schools had a “more substantial advantage” in being effective at proper education in teaching Spanish and mathematics test scores these basic class subjects than the independent and franchised schools of less than three schools. Also, CATO found that their results are consistent when data from 2002, 2005, and 2006 were plugged into this model. The two main conclusions that the researchers found were that the public and private voucher independent school gap of achievement is not very significant (though school franchises have a positive effect on student achievement) and that schools that belong to a franchise of more than four schools have higher student achievement with those that have two or three schools in their franchise.

All in all, CATO’s findings are quite interesting to the casual observer. First, larger franchises of private voucher schools outperform their smaller counterparts, which barely outperform singular independent private voucher schools. Second, these results are consistent over time after controlling for the effect of religious affiliation with the schools. Some of the policy implications of this analysis are that larger private voucher franchises have a stronger infrastructure to direct innovations in curriculum, have access to private investment, and could lead to more effective development and interactions between the school and the community it serves. There are still some aspects that need to be taken into account, such as the profitability of private schools, whether having a single organization run a network of schools could create “increasing educational outcomes,” and if the results of this analysis would lead to a flood of low-quality for-profit independent schools.

Spencer Irvine is a research assistant at Accuracy in Academia.

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