School Choice, Stratification, and Information on School Performance: Lessons from Chile

In the early 1980s, Chile implemented a nationwide school choice system, under which the government finances education via a flat per-student sub- sidy (or voucher) to the public or private school chosen by a family. At present, about 94 percent of all schools (public, religious, and secular private) are voucher funded. More than half of urban schools are private, and most of these operate as for-profit institutions.1 Since the early 1990s, Chile has also publicized information on school performance and increased per pupil expen- diture substantially. Despite these and other reforms, Chile has found it challenging to improve students’ learning outcomes.2 Hsieh and Urquiola find that the country’s rel- ative performance in international tests did not change much between 1970 and 1999.3 Its performance on the 2000 Programme for International Student Assessment (PISA) is not only much lower than the OECD average but is similar to that of other Latin American countries and low relative to countries with similar income per capita.