Association for Public Policy Analysis & Management

School socioeconomic segregation poses significant challenges for students’ short- and long-term success. Integrating and diversifying schools with regard to students’ socioeconomic status is an important policy endeavor, but can be an uphill battle due to several barriers including residential segregation, inequitable distribution of choice options, information asymmetries, and others. In this study, I examine determinants of school segregation in the Chilean context, where non-random admission procedures (for example, “cream skimming” by ability) and tuition fees at public and private-subsidized schools are thought to be particularly problematic. I estimate the causal effect of eliminating these two barriers on school socioeconomic segregation by leveraging a recent policy shock in Chile that aims at terminating with both in the short term.

The Chilean education market is characterized by the decentralization of public schools (municipal schools, representing 37% of the total enrollment), the availability of public funding to private schools (private subsidized schools, representing 55% of the total enrollment), a nationwide voucher and school choice system that includes both municipal and private subsidized schools, and a small proportion of private non-subsidized schools. Empirical studies have shown that the education system exhibits moderate to high level of school socioeconomic segregation. In order to reduce socioeconomic segregation, in 2015 the Chilean Congress passed the Inclusion Law. This law introduces two interventions at the school level: (i) it prohibits all schools receiving public funds to charge tuition to families, defining a process to make all subsidized schools free in the next few years (free treatment); and, (ii) it prohibits non-random admission by schools, introducing a centralized lottery-based deferred admission system (open admission treatment).

Taking advantage of the implementation process of the policy, which results in schools being affected by none, one, or two of these treatments in the first years of the introduction of the policy, I estimate a staggered difference-in-difference model to assess whether school socioeconomic segregation changes as a result of this policy shock. To determine socioeconomic status, I rely on a dichotomic student variable (vulnerable/non-vulnerable status), which is constructed by the government for administrative purposes. I measure school socioeconomic segregation by creating an index that estimates the absolute difference between the school proportion of vulnerable/non-vulnerable students and the district’s proportion.

Results for the first two years of implementation show that between-school socioeconomic segregation decreases by approximately six percentage points in schools eligible for the free treatment. When considering only entry grades (in the case of Chile, PK, K, 1st, and 7th grade), I observe reductions in between-school socioeconomic segregation in schools where only the free treatment, only the open admission treatment, and both treatments were implemented. These results are consistent across different specifications, including controlling for school and district characteristics, and year and district fixed effects. Ongoing and future work will examine heterogeneous effects of the policy (by levels of residential segregation, intra-district competition, and within-district quality dispersion across schools), as well as intra- and inter-district school socioeconomic segregation.