Responsible researcher: Eduarda Miller de Figueiredo
Authors: Joshua Angrist, Eric Bettinger, Erik Bloom, Elizabeth King and Michael Fremer
Intervention Location: Bogotá and Jamundi
Sample Size: 3.000
Sector: Education
Variable of Main Interest: Educational Performance
Type of Intervention: Vouchers for Private Schools
Methodology: Experimental Evaluation
Summary
In developing countries there is a high enrollment rate in private schools, unlike in developed countries, since in developing countries there is the idea that private schools work better than public schools. Based on the demand-side financing program, PACES in Colombia grants vouchers for students to attend private schools in secondary education, as long as they maintain good academic performance. When analyzing the impacts of vouchers on the educational level, the authors found that countries with a weak public school infrastructure and a well-developed private education sector can benefit from school financing programs, increasing the educational level.
While in the United States enrollment in private schools is only 11% (US Department of Education, 1998), in developing countries this number is 2 or even 3 times higher (James, 1993). Problems with public schools are generally more severe in low-income countries, as the quality and integrity of public service provision are correlated with income level (Rauch and Evans, 2000).
This idea that private schools perform better than public schools in the developing world has led governments in poor countries to experiment with financing programs such as vouchers (Psacharopolous et al., 1986).
The article discussed here will present evidence on the impact of the school voucher program in Colombia, the so-called Secondary Education Coverage Expansion Program[1].
Of Colombian children, 89% of primary school age were enrolled in 1993, however, only 75% of the eligible population was enrolled in secondary schools [2] . When looking at the poorest quintile of the population, 78% were enrolled in primary school, but only 55% were enrolled in secondary school (Sanchez and Méndez, 1995). Furthermore, high repetition rates in Latin America are widely seen as symptoms of poorly functioning public schools.
PACES was established in late 1991 as part of an attempt to expand the private provision of public services, to expand school capacity, and to increase secondary school enrollment rates (King et al., 1997, 1998). This program provided vouchers to more than 125,000 students, covering just over half the cost of a private school
To qualify for a voucher, applicants must be entering 6th grade and be 15 years old or younger, and to renew vouchers, students must maintain satisfactory academic performance – that is, they must be approved for the next grade.
The program focuses on low-income families, where applicants had to present a utility bill to prove their residential location and voucher eligibility. Furthermore, it was restricted to children attending public primary schools.
The maximum value of the voucher was initially defined to correspond to the average monthly fee for low- to medium-cost private schools in the three largest cities in Colombia. Over the years, vouchers became less generous as they did not keep up with inflation and, as a result, beneficiaries had to supplement their monthly fees with additional payments.
1,600 PACES candidates were interviewed, totaling around 3,000 interviews overall, stratified in order to obtain an approximately equal number of winners and losers (55% PACES draw winners and 53% PACES losers), and in the 1995 cohorts and 1997 from Bogotá and the 1993 cohort from Jamundi (suburb of Cali). The draw was random within the localities and conditioned on whether or not the families had access to a telephone.
The estimates of the effects of the draw are based on a regression that contains as a dependent variable the child i of the application cohort c ( ), in addition to a vector of individual characteristics, an indicator of selection (or not) for the voucher and an effect of candidate cohort to control for the fact that the probability of winning varied by city and year.
A test was also carried out with children from the 1995 cohort in three Neighborhoods of Bogotá, in which the neighborhoods were chosen because they had a relatively large number of winners and losers. The tests were administered in 1999 and participants were requested by telephone, followed by a letter describing the test objective and, to encourage participation, snacks were offered at the test sites, a prize draw and each student received 3 to 6 dollars to cover travel costs. Of the 1,176 candidates surveyed in Bogotá in 1995, 473 were invited to the test.
The most immediate effect of the lottery was to increase the likelihood of receiving a scholarship to private schools. At the time of the study, voucher winners were 51 percentage points more likely than losers to use some type of scholarship (including non-PACES scholarships).
Some draw winners also lost their voucher after repeating a grade (7%), while 5% switched to non-participating private schools. Since the effect of winning the PACES lottery on the probability of attending private school was even greater in 7th grade, this was probably because losers were more likely to drop out of private school.
According to the authors, these results suggest that the decision between public and private schools was sensitive to the variation in the price of private schools induced by the program, while the decision to attend school was not. This is consistent with a model in which families most willing – and able – to pay for education attend private schools; an intermediate group attends public school; and those less willing – or with less ability – do not attend private school.
Furthermore, another result found is that the winners of this draw completed more studies than the losers, and were less likely to repeat a year. Furthermore, it was observed that there was no statistically significant effect on enrollment. For example, in the Bogotá sample for the year 1995, more than 20% of losers had repeated a grade since the beginning of 6th grade, and almost 20% had repeated 6th grade. But the probability of repeating the year was reduced by 5 to 6 percentage points for those who won the draw.
The results of tests applied in 1999 in Bogotá neighborhoods show that the winners of the draw scored a little more than 0.2 standard deviations more than the losers. According to Cole et al. (1993), two tenths of a standard deviation is approximately the score gain associated with an additional school year.
The impacts of vouchers can be explained through different channels. First, because the winners of the draw were more likely to attend participating private schools and these schools were better than public schools. Second, vouchers allowed those students who would have attended private schools anyway to attend more expensive private schools. And third, the winners had an incentive to dedicate more effort to school for fear of losing their vouchers when they failed the year.
The results demonstrate that the winners of the voucher draw benefited from a higher educational level, which occurred mainly as a consequence of the reduction in grade repetition and higher test scores. Thus, suggesting that financing programs such as PACES may be a cost-effective way to increase educational performance in countries that contain a weak public school infrastructure and a well-developed private education sector.
References
Angrist, Joshua, Eric Bettinger, Erik Bloom, Elizabeth King, and Michael Kremer. 2002. "Vouchers for Private Schooling in Colombia: Evidence from a Randomized Natural Experiment." American Economic Review, 92 (5): 1535-1558.
[1] Secondary Education Coverage Expansion Program (PACES).
[2] Secondary school covers grades 6 to 11, which is when Colombian high school ends.
Check the Institution's registration in the e-MEC System here
© 2025 All Rights Reserved
