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On the Determinants and Implications of School Choice: Semi-Structural Simulations for Chile

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On the Determinants and Implications of School Choice: Semi-Structural Simulations for Chile

Abstract

This paper studies the implications of school choice in the context of the Chilean quasivoucher system. We use information of school choices of about 80,000 students that lived in the Metropolitan Area of Santiago in Chile in 2002 and the results of the discrete choice model estimated in Gallego and Hernando (2008) to perform a number of exercises aimed at quantifying what we call the “value of choice” (i.e. how much do households gain from a school choice system?) against a number of counterfactuals that restrict school choice in several dimensions (geographic choice, the existence of top ups, and the supply of voucher schools). We also (i) analyze the effects on socioeconomic segregation of students and (ii) study the potential effects of introducing a non-flat voucher that is decreasing in students’ SES. Our results suggest that overall, school choice seems to be valuable to households, but there is a lot of heterogeneity in its value. In some simulations, school choice is regressive (as when lotteries are used to allocate students to current schools; or when we consider the effects of the increase in the supply of voucher schools) and in other progressive (when students are allowed to choose outside the county in which they live). Interestingly, policies that restrict the use of top ups to the voucher do not seem to reduce segregation in a significant way. This contrasts with the introduction of a differentiated voucher, which would mostly benefit the poor and even compensate them for loses from some dimensions of school choice observed in particular groups.
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... London: Bloomsbury. 4 Hernando, 2009;Carrasco and San Martín, 2012), it is understandable that the socioeconomic distribution of the schools partially reflects the residential segregation, an association that empirical research has demonstrated for Chilean cities (Valenzuela et al., 2014;Arteaga et al., 2014). In fact, studies applying statistical simulations suggest that in a scenario of random assignment of students to schools within their cities, the Duncan Dissimilarity Index of social segregation of schools in the metropolitan Santiago area would be the same as the residential segregation (Gallego and Hernando, 2008), with it increasing in a scenario where each student attended the school nearest his/her home (Elacqua and Santos, 2013). In short, residential segregation explains a part of school segregation. ...
... 6 socially integrated (Valenzuela et al., 2014;Elacqua, 2009;Elacqua and Santos, 2013;Roje, 2014;Mineduc, 2012;Paredes et al., 2013). 2 One of the key differences among private schools, essentially linked to market dynamics, is the existence and the amount of tuition charged to families which trigger a predictable tendency for price differentiation among schools. Accordingly, research has found that subsidized private schools with co-payment are the most socially segregated voucher schools (Elacqua, 2012;Roje, 2014) and that the higher the proportion of schools charging tuition to families in a city, the higher the school social segregation (Gallego and Hernando, 2008;Valenzuela et al., 2014;Elacqua and Santos, 2013;Roje, 2014;Arteaga et al., 2014). Strictly speaking, evidence suggests that school tuition should be interpreted as a continuum going from elite schools to the low-fee subsidized private schools which makes tuition a variable that affects school social segregation across the price range (Valenzuela et al., 2014;Paredes et al., 2013). ...
... London: Bloomsbury. 8 metropolitan area of Santiago (Gallego and Hernando, 2008;Flores and Carrasco, 2013;Arteaga et al., 2014), although researchers disagree as to whether this should be interpreted as an effect of the bias distribution of the supply or differences in family preferences. Strictly speaking, the market dynamics we observe are the interaction between supply and demand reciprocally shaped over time. ...
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Academic research has accumulated a considerable amount of evidence to understand the factors associated with the production of socio-economic school segregation in Chile, which is comparatively very high. We interpret those findings as robust evidence of the segregation effects caused by market dynamics prevalent in Chilean education. On the supply side, the most relevant segregation forces are the increasing presence of private schools, the for-profit motivation of most of the new private schools, the relevance of tuition-charging private schools (including state-funded schools), the discriminatory school practices during the admission and the schooling processes, and the competition for family preferences among all kinds of schools (including public schools) in order to obtain public funding via vouchers. All of these factors are more relevant than the urban segregation that also contributes to produce school segregation. On the demand side, families from all social classes apply strong socially oriented criteria for school choice: broadly, high social class families prefer to educate their children in socioculturally homogeneous elite schools; middle-class parents reject free and non-selective public schools to avoid low-income families that they associate with risky behaviours; and while some low social class families share a similar rationale with the middle classes, others do not see school choice as a relevant mean to avoid social risks and enrol their children in neighbourhood schools, which in large cities tend to be highly segregated environments. Although the centrality of social aspects for school choice is decisive in most cases, there are families for whom the meaning that guides the school choice does not fall into that dimension (e.g. religious or academically oriented families); nevertheless, given the institutional characteristics of Chilean education, the actions of those families inadvertently also have an effect on segregation.
... By estimating the structural parameters of the model, we are able to assess the empirical relevance of each of these components in determining the quality of schools attended by Chilean children and how this might differ for families from different socioeconomic backgrounds. As many authors have emphasized (e.g., Gallego and Hernando (2008) and Hsieh and Urquiola (2006)), the Chilean system is probably the most massive school choice program in the world, making it an ideal context to work in to assess the relative importance of these different determinants of school choice. Thus, our results speak to the issue of the potential limitations of market-based school systems in general. ...
... Several authors study the determinants of school choice in the Chilean context. 6 For instance, Gallego and Hernando (2008), using a semi-structural approach, find results that suggest that the school choice implemented in Chile increased overall student welfare, but they also find that there is a lot of heterogeneity in the size and even the sign of the welfare change. ...
... By estimating the structural parameters of the model, we are able to assess the empirical relevance of each of these components in determining the quality of schools attended by Chilean children and how this might differ for families from different socioeconomic backgrounds. As many authors have emphasized (e.g., Gallego and Hernando (2008) and Hsieh and Urquiola (2006)), the Chilean system is probably the most massive school choice program in the world, making it an ideal context to work in to assess the relative importance of these different determinants of school choice. Thus, our results speak to the issue of the potential limitations of market-based school systems in general. ...
... Several authors study the determinants of school choice in the Chilean context. 6 For instance, Gallego and Hernando (2008), using a semi-structural approach, find results that suggest that the school choice implemented in Chile increased overall student welfare, but they also find that there is a lot of heterogeneity in the size and even the sign of the welfare change. ...
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Limitations in the ability of parents to compare schools have important implications for market oriented educational systems, which rely on parents choices to improve quality through competition. To empirically study these limitations, we develop and estimate a static model of elementary school choice that distinguishes between preferences for academic quality, the ability to differentiate between schools of different quality, and constraints in terms of the schools available to different households. Because school quality might be endogenous to parents' choices, we identify the key parameters related to preferences for quality using exogenous variation in schools' funding introduced by a policy that substantially increased the voucher amount for each enrolled socioeconomically vulnerable student. We estimate the model using a combination of administrative and survey data from Chile, which includes rich information on how parents compare the academic quality of schools. Using counterfactual simulations, we find the interaction between limitations to tell schools apart and differences in preferences across households plays an important role in decreasing the quality of schools attended by Chilean children, especially for children with less educated parents.
... Some of those features 14 The last special priority for previous alumni of the school excludes students who were expelled from the school. 15 In the existing literature on school choices in Chile such as Chumacero, Gómez, & Paredes, 2011;Gallego, Hernando, Flabbi, & Tartari, 2008, the researcher can mostly observe only the final school choices, and the student ranks over schools are unobserved. Here, however, I observe the ranking of schools in addition to the final allocation. ...
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The Deferred Acceptance algorithm is a popular school allocation mechanism thanks to its strategy proofness. However, with application costs, strategy proofness fails, leading to an identification problem. In this paper, I address this identification problem by developing a new Threshold Rank setting that models the entire rank order list as a one-step utility maximization problem. I apply this framework to study student assignments in Chile. There are three critical contributions of the paper. I develop a recursive algorithm to compute the likelihood of my one-step decision model. Partial identification is addressed by incorporating the outside value and the expected probability of admission into a linear cost framework. The empirical application reveals that although school proximity is a vital variable in school choice, student ability is critical for ranking high academic score schools. The results suggest that policy interventions such as tutoring aimed at improving student ability can help increase the representation of low-income low-ability students in better quality schools in Chile.
... Later, by comparing parental 'stated preferences' and 'revealed preferences', Elacqua, Schneider & Buckley (2006) conclude that the socioeconomic composition of the schools plays an important role in establishing parental preferences. Other studies (Gallego & Hernando, 2009;Chumacero, Gomez, & Paredes, 2011) have highlighted that parents take into consideration factors related to the academic quality of the school when making the decision to enrol. ...
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The influence of the school's socioeconomic composition on students' academic outcomes has been observed intensively in recent decades. However, several methodological problems have hindered development of a consensus on the existence of those effects or their magnitude. Drawing on Chilean administrative data, this study investigates the impact of the socioeconomic status (SES) of primary school classmates on students' achievement at secondary school, the magnitude of the effects, and how they relate to types of schools and the students' SES. Unlike some previous studies, this work explicitly attempts to control the non-random allocation of students in schools, accounts for prior achievement, and uses composite measures to express the characteristics of the SES. The results-based on estimates of school fixed effects-suggest a small positive impact associated with increases in the level of the mean SES of the classmates in both Maths and Language. Greater SES heterogeneity leads to virtually no gains in scores. The magnitude of the impact varies across subjects and according to the students' SES.
... Implementation of this new Law began in 2016 and will be put into effect over more than a decade 6 . This work does not look at the changes produced by the 4 However, some empirical analysis suggests that the main driver of segregation at schools is the residential segregation and that co-payment only has a marginal effect on segregation (Gallego & Hernando, 2009) 5 A previous rule (2006 established that all state-funded schools should include 15% of vulnerable students. However, there is no information about the supervision of this norm and it has been interpreted as being "forgotten" or "unknown" by the schools (Treviño, Salazar, & Donoso, 2011). ...
Preprint
Socioeconomic segregation-or the separation of social groups-has been a central topic for education systems in which market-driven reforms have been implemented. This study analyses trends of socioeconomic segregation in Chile (1999-2016), observing a period with an absence of policies aimed at reducing segregation (1999-2008) and a later stage when policies with the potential to affect the socioeconomic composition of schools were implemented (2008-2016). Using the 'Square Root Index', the dissimilar distribution of the students across schools is assessed by the type of provider, the use of co-payment, and the schools' selectivity status at both primary and secondary level. The results suggest that segregation increased from 1999 to 2010 and has remained stable (and extremely high) since then. Segregation appears to be associated with certain key features of the Chilean educational system, such as the selectivity status of schools or the use of co-payment, but also to parental preferences. Further analysis linking local information with PISA databases suggests that previous estimates of segregation in Chile may be underestimating the level of segregation of some social groups, particularly at the secondary level.
... El cobro puede operar como restricción, pero también como señal de calidad (Raczynsky y Hernández, 2011). La composición socioeconómica y racial es relevante (Aghazadian, 2009;Altonji et al, 2010;Lauen, 2008;Rambla, 2003;Bifulco y Ladd, 2006;Elacqua et al, 2004aElacqua et al, , 2004b así como lo es el prestigio y estatus (Gallego et al, 2007), la estructura familiar (Aedo, 1996), la percepción de seguridad del barrio (Del Cueto, 2004; Raczynski y Hernández, 2011) y otros aspectos institucionales como la dependencia administrativa, orientación religiosa, infraestructura y apariencia física, tamaño de los cursos, educación mixta, etc. (Ansión et al, 1998, Gallego et al, 2009aGallego et al, 2009b;Córdoba, 2006;Bernal, 1999;Chakrabarti y Roy, 1996;Kleitz et al, 2000;Gallego et al, 2007, entre otros). También son relevantes en la literatura los aspectos individuales como la habilidad, la personalidad (Bell 2005) y el género (Gallego et al, 2009b). ...
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El alcance final de esta iniciativa pretende informar sobre los diversos temas de investigación que abordan los estudiantes chilenos en el Reino Unido y difundirlos a una audiencia lo más amplia posible. En este sentido, como investigadores jóvenes, creemos que el presente libro es un aporte preliminar en la difícil tarea de difundir ciencia en Chile. De esta manera, el perfil de nuestra propuesta es constructivo y crítico, en miras de poder incentivar el desarrollo de iniciativas similares entre otras comunidades de investigadores chilenos en el exterior. Esperamos el lector disfrute de este libro de ideas para Chile.
... Fue necesario innovar en el método de análisis de la composición social del sistema escolar. Investigaciones chilenas han usado el Índice D como indicador de segregación escolar (Gallego & Hernando, 2008;Ministerio de Educación de Chile, Mineduc, 2012;Valenzuela et al., 2009; Valenzuela, Bellei y de los Ríos, 2014) 6 . Otro índice considera toda la dispersión del nivel socioeconómico de los estudiantes, descomponiendo la variabilidad total en dos partes, la encontrada entre escuelas y la encontrada al interior de estas 7 . ...
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Este artículo estudia la inclusión social escolar. Se investiga hasta qué punto la composición social de las escuelas se relaciona con la del territorio donde vive la gente, en el entendido de que este aspecto condicionaría las oportunidades de mixtura social escolar. Datos obtenidos de fuentes diversas como la prueba Simce 2013 de 4° básico y la Encuesta Casen 2013 se usaron para averiguar si características comunales tales como el tamaño poblacional, el ingreso monetario de los hogares, la heterogeneidad social, la pobreza y otras, predicen la composición social escolar de las comunas en la Región Metropolita de Santiago. Puesto que se pone el foco en la inclusión social de la escuela —en un contexto general de segmentación— se propone un indicador apropiado para visibilizarla. La quinta parte de los estudiantes de 4°básico en 2013 asistió a clases con compañeros de diversas condiciones socioeconómicas, en escuelas que podrían denominarse inclusivas. Se usó un modelo de regresión logística para ajustar los datos, el cual predijo mejor a las escuelas segregadas que a las mixtas, no obstante, entregó valiosas pistas para entender cómo las variables territoriales pueden afectar a la mixtura escolar.
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This paper studies private school market behavior. If school quality is a normal good and schools have market power, profit‐maximizing schools may lower enrollment when incomes rise given parents' preferences for small class sizes and high‐socioeconomic status (SES) classmates. To demonstrate the possibility of such a response, I present simulations based on a stylized model of school pricing. Using data on local income variation in Chile, I show that positive income shocks cause private school prices to rise and enrollments to fall. Enrollment declines are concentrated among low‐SES students, who do not experience the same test score gains as their higher‐SES peers. (JEL I24, L1, O15)
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How do parents choose among schools when they are allowed to do so? In this paper, we analyze detailed information of 70,000 fourth-graders attending about 1,200 publicly subsidized schools in the context of the Chilean voucher system. We model the school choice of a household as a discrete choice of a single school, based on the random utility model developed by McFadden (1974) and the specification of Berry, Levinsohn, and Pakes (1995), which includes choice-specific unobservable characteristics and deals with potential endogeneity. Our results imply that households value some attributes of schools, with the two most important dimensions being test scores and distance to school. Interestingly, at the same time, our results suggest there is a lot of heterogeneity in preferences because the valuation of most school attributes depend on household characteristics. In particular, we find that while proximity to school is an inferior attribute, test scores is a normal attribute. We present evidence that our results are mainly driven by self-selection and not by school-side selection. As a nal check, we compute the average enrollment elasticity with respect to all school attributes and find that higher elasticities are correlated with higher supply of the attribute, especially in the case of test scores-enrollment elasticities for private schools.