Association for Public Policy Analysis & Management

Advocates for school choice argue that competition among schools can increase student achievement. Skeptics worry that some forms of school choice may increase segregation, and argue that children’s achievement is primarily shaped by family resources such as parental education and income. We estimate the effects of expanding school choice in Chile, where between 2002 and 2013 the share of students attending private voucher schools grew from 38 percent to 55 percent, while median family income doubled, income inequality declined, and the percentage of mothers with a high school degree increased by 20 percentage points.

Using a panel regression with municipality fixed effects, we find that growth of the private voucher sector did not increase test scores or grades but did increase attendance rates. Increases in parental income and education raised grades and test scores but did not improve attendance. Segregation increased with growth of the voucher sector and with growth in family incomes, but did not decline with reductions in income inequality.