Revealed Preferences of Private School Owners in Chile: The Case of Adjusted Voucher Law

Revealed Preferences of Private School Owners in Chile: The Case of Adjusted Voucher Law In 2008, the Chilean legislature enacted the Adjusted Voucher Law (SEP). The SEP law recognizes that it is more costly to educate disadvantaged students by introducing a system of weighted student funding by which the amount of the per-pupil voucher differs with the educational needs of the student. The additional per-pupil voucher is tied to an increased role of the Ministry of Education in monitoring and classifying schools based on student performance and holding them accountable for their outcomes. The SEP law also forbids participating schools from using parental interviews and admissions tests to select and expel students. In this paper, we analyze the costs and benefits of participating in the SEP program and find that, while most public schools participate, almost 40 per cent of private voucher schools choose not to receive the additional SEP funding. We find that while more advantaged private vouchers schools choose not to participate because the benefits of receiving the additional funds often do not outweigh the costs of having to comply with the SEP non-selection requirements, other schools lack the capacity or access to technical support to be able to meet the program's academic goals. Our findings shed light on some of the short-comings of the SEP program and Chile's educational system in general.