Targeted Vouchers, Competition Among Schools, and the Academic Achievement of Poor Students

Working Papers from Princeton University. Economics Department.

Abstract: I develop a model of supply and demand with imperfect competition to study the primary education market in Chile. I use this framework to empirically analyze how voucher policy affects competitive incentives for schools to supply quality. First, I show descriptive and causal evidence that the introduction of a voucher targeted at poorer students led private schools to improve quality, especially in the poorest neighborhoods. Then, I use my estimated demand model to quantify the mechanisms that incentivized for-profit schools to improve. My estimates indicate that schools mark down quality below the competitive benchmark, and this markdown is larger in poorer areas. The targeted voucher policy induced nuanced changes in the two mechanisms that drive the observed improvements in quality in my model market power and marginal revenue. The results indicate that the policy improved equity by providing more resources and increasing competition in neighborhoods where incentives to invest in quality are weakest.

Keywords: School Choice; School Competition; Targeted Vouchers; Market Power; Chile (search for similar items in EconPapers)
JEL-codes: I20 (search for similar items in EconPapers)
Date: 2021-05
New Economics Papers: this item is included in nep-com, nep-des, nep-edu and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
https://christopherneilson.github.io/work/document ... _SEPVouchers2021.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pri:econom:2021-48

Access Statistics for this paper

More papers in Working Papers from Princeton University. Economics Department. Contact information at EDIRC.
Bibliographic data for series maintained by Bobray Bordelon ().