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Quality of Schooling, Returns to Schooling and the 1981 Vouchers Reform in Chile

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  • Patrinos, Harry A.
  • Sakellariou, Chris

Abstract

In 1981, Chile introduced nationwide school choice by providing vouchers to any student wishing to attend a “voucher school”. We use a binary instrument based on the reform and unique information on individual cognitive skills to examine the importance of cognitive skills on labor market outcomes. The results suggest that the main beneficiaries of the reform were those who at the time were pupils in basic schooling. Once the treated group is expanded to include older (secondary school age) students, schooling premiums decrease dramatically while the return to cognitive skills increases accordingly, suggesting that a large part of the estimated return from a typical earnings function is due to classical ability bias. Overall, the findings point to heterogeneous effects of the reform.

Suggested Citation

  • Patrinos, Harry A. & Sakellariou, Chris, 2011. "Quality of Schooling, Returns to Schooling and the 1981 Vouchers Reform in Chile," World Development, Elsevier, vol. 39(12), pages 2245-2256.
    • Handle: RePEc:eee:wdevel:v:39:y:2011:i:12:p:2245-2256
    DOI: 10.1016/j.worlddev.2011.04.018
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    2. Martin Mulwa & Timothy Gichana, 2020. "Does education reduce gender differentials in labor market participation? A Kenyan perspective," African Development Review, African Development Bank, vol. 32(3), pages 446-458, September.
    3. Hoogerheide, Lennart & Block, Joern H. & Thurik, Roy, 2012. "Family background variables as instruments for education in income regressions: A Bayesian analysis," Economics of Education Review, Elsevier, vol. 31(5), pages 515-523.
    4. Iturra, Victor & Gallardo, Mauricio, 2022. "Schools, circumstances and inequality of opportunities in Chile," International Journal of Educational Development, Elsevier, vol. 95(C).
    5. Krafft, Caroline & Elbadawy, Asmaa & Sieverding, Maia, 2019. "Constrained school choice in Egypt," International Journal of Educational Development, Elsevier, vol. 71(C).
    6. Tamar Khitarishvili, 2010. "Assessing the Returns to Education in Georgia," Economics Working Paper Archive wp_608, Levy Economics Institute.
    7. Francesca Marchetta & Tom Dilly, 2019. "Supporting Education in Africa: Opportunities and Challenges for an Impact Investor," Working Papers hal-02288103, HAL.
    8. Contreras, Dante & Elacqua, Gregory & Martinez, Matías & Miranda, Álvaro, 2016. "Bullying, identity and school performance: Evidence from Chile," International Journal of Educational Development, Elsevier, vol. 51(C), pages 147-162.

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