The Effectiveness and Efficiency of Private Schools in Chile's Voucher System

This paper assesses the relative effectiveness and efficiency of private and public schools in Chile, where the military government implemented a national voucher plan in 1980. Non-religious voucher schools (accounting for two-thirds of primary enrollments in all private voucher schools) are marginally less effective than public schools in producing academic achievement in the fourth grade; at best, they are similarly effective. Catholic voucher schools are somewhat more effective than public schools. Nevertheless, non-religious schools are more efficient, by virtue of producing academic achievement at a lower cost. The difference is probably attributable to lower teacher wages and constraints on public school resource allocation. The relative efficiency of public and Catholic schools is similar. We tentatively conclude that the case for shifting public resources to privately run schools is mixed (although a comprehensive evaluation would require evidence not provided by this research).