How do vouchers work evidence from colombia
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How do Vouchers Work? Evidence from Colombia. 7 June 2007 World Bank. Eric Bettinger, Case Western U Michael Kremer, Harvard Juan Saavedra, Harvard. Educational Vouchers. Controversial and Often Debated Educational Reform Large-Scale Voucher Programs Chile & Colombia

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How do Vouchers Work? Evidence from Colombia

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How do vouchers work evidence from colombia

How do Vouchers Work?Evidence from Colombia

7 June 2007World Bank

Eric Bettinger, Case Western U

Michael Kremer, Harvard

Juan Saavedra, Harvard

Educational vouchers

Educational Vouchers

  • Controversial and Often Debated Educational Reform

  • Large-Scale Voucher Programs

    • Chile & Colombia

    • US Sites (Milwaukee, Cleveland, Florida, Ohio)

    • Other Voucher-Like Programs

      • Private Programs in US

      • Regulated Voucher Programs Internationally (e.g. Sweden, Japan, The Netherlands)

  • Motivation for Programs Differ Substantially Across Sites

    • Competition and Opportunity

    • Overcrowding

Evidence on educational vouchers

Evidence on Educational Vouchers

  • International Evidence

    • Colombia

    • Chile

  • US Evidence

    • New York City Scholarship Program

    • Milwaukee Voucher Program

    • Other Private/Public Programs

Welfare implications of vouchers

Welfare Implications of Vouchers

  • Costs/Benefits to Students Directly Receiving the Voucher

    • Cost of Voucher

    • Change in Educational Outcomes

  • Costs/Benefits to Students not Receiving the Voucher

    • Change in Peers

    • Competition

    • Change in Resources

Peer effects and vouchers

Peer Effects and Vouchers

  • Hsieh and Urquiola (2006)

    • Chilean Voucher Program

    • Key Finding was that Aggregate Outcomes Did Not Change

    • Voucher Recipients Experienced a Positive Peer Effect

    • Other “Left Behind” Students Experienced a Negative Effect

  • Epple and Romano (1998)

    • Model of Educational Vouchers

    • Peer Effects Need Not Be Zero Sum but Some Students are Worse Off

Other peer effect literature

Other Peer Effect Literature

  • Sacerdote (2001)

  • Duncan, Boisjoly, Kremer, Levy and Eccles (2005)

  • Zimmerman (2003)

Simple model with peer effects

Simple Model with Peer Effects

  • Consider the Following Educational Production Function

  • Yi = Educational Outcome Student i

  • Xi = Socioeconomic Characteristics of Student i

  • = Average Characteristic of School

  • P = Program Participation

Model cont

Model (cont.)

  • Positive Voucher Effects but No Peer Effects

    β1=0, β2>0

  • Positive Voucher Effects are Solely Peer Effects

    β1>0, β2=0

Voucher comparisons

Voucher Comparisons

  • Because of Randomization, Difference in Average Outcome of Voucher Lottery Winners and Losers Measures the Effect:

  • Reported Effects in Angrist et. al. (2002, 2006)

Social effects

Social Effects

  • Depends on Values of β1 and β2

  • If β1=0, β2>0, then social effect is β2

  • If β1>0, β2=0, then no social effect in simple linear-in-means peer effect model

How does one untangle peer and voucher effects

How does One Untangle Peer and Voucher Effects?

  • Ideal Experiment:

    • Randomly Assign Voucher Students to Group with “Worse” Peers

    • Measure Whether Voucher Effect is Present When Peer Effect is Bad

    • If Voucher Effects are from Peer Effects, then Voucher Effects Should Disappear or Even Be Negative

  • Colombia PACES Program May Have Such an Experiment

Colombia s paces program

Colombia’s PACES Program

  • Objectives

    • Increase secondary school enrollment for poor

  • Rules

    • Student must be entering 6th grade and under 15 years old

    • Students must provide evidence that they live in poor neighborhood (strata 1 or 2)

    • Renewable through graduation unless student is retained in a grade

    • Vouchers awarded by lottery if demand exceeds supply

    • Covered about 60% of fees

  • Scope

    • 216 Municipalities have Participated

    • Over 125,000 secondary students have received support

Previous work on colombia

Previous Work on Colombia

  • Angrist, Bettinger, Bloom, King, Kremer (AER 2002)

  • Surveyed Voucher Applicants from Bogotá 1995 Lottery

  • Compared Voucher Lottery Winners and Losers

  • Effects after Three Years

  • Key Findings on Voucher Recipients:

    • Increased Usage of Private Schools

    • Higher Educational Attainment

    • No Difference in Drop-out Rates

    • Less Grade Repetition

    • Higher Test Scores

    • Less Incidence of Teen-age Employment

More previous work on colombia

More Previous Work on Colombia

  • Angrist, Bettinger, Kremer (AER 2006)

  • Tracked Applicants to Bogotá 1995 Lottery Using Administrative Records

  • Compared Voucher Lottery Winners and Losers

  • Effects after Six to Seven Years

  • Key Findings on Voucher Recipients:

    • Increased Likelihood of Taking College Entrance Exam

    • Improved Exam Performance in Math and Language

Other details on colombia s paces

Other Details on Colombia’s PACES

  • Students Had to be Accepted at a Private School PRIOR to the Voucher Lottery

    • Some Students Applied to Vocational Schools

    • Vocational Schools May Attract “Worse” Peers

  • The Voucher was Portable in Theory but Not Practice

    • 1998 MIT Survey of Voucher Applicants Shows that Voucher Winners Did Not Retain Voucher When Transferring Schools

Patterns of attendance

Patterns of Attendance

Patterns of attendance1

Patterns of Attendance

Patterns of attendance2

Patterns of Attendance

Voucher winners and vocational schools

Voucher Winners and Vocational Schools

  • Voucher Winners who Applied to Vocational Schools Stay in Vocational Schools

  • Lack of Portability Creates Rigidity

    • Voucher Winners Stay Even if School is Suboptimal

  • Did Vocational Schools Have “Worse” Peers?

Were vocational schools worse

Were Vocational Schools Worse?

  • WB Funded School Survey in 2006

  • Attempted to Contact 300 Schools

    • Chose Schools with Most Voucher Applicants Attending

    • Schools Represented 85 Percent of Voucher Applicants

  • Survey Gathered Significant Data on Peer and School Quality

Comparing peer quality

Comparing Peer Quality

  • Estimate for Sample of Students Who Applied to Vocational Schools Prior to Lottery

    Wi = α + γVi +πZi+ ui

    Wi= School characteristic of student i

    Vi = Student i is voucher winner

    Zi = Other Student Characteristics

  • Key issue will be low sample size. We only know schools of attendance for about 200 voucher students who had wanted to attend vocational school.

    • Pooling Estimates

Diffs in peer quality

Diffs in Peer Quality

More diffs in peer quality

More Diffs in Peer Quality

How to increase power

How to Increase Power?

  • Average Effect Sizes

    • Normalize Measures

      • Standard Deviation Units

      • Monotonicity

    • Estimate Effect Sizes Simultaneously

      • Fully Interacted Model

      • Similar to Seemingly Unrelated Regression

    • Combine Coefficients

  • Kolmogorov-Smirnov

    • If there is no Effect of a Program, the Family of T-Statistics Should Behave Like Normal Distribution

    • Doesn’t Account for Correlation Between Outcomes

Average effect sizes

Average Effect Sizes

Family of t statistics vocational voucher applicants

Family of T-Statistics Vocational Voucher Applicants

Family of t statistics non vocational voucher applicants

Family of T-Statistics Non-Vocational Voucher Applicants

Key results on peer quality

Key Results on Peer Quality

  • Among Voucher Applicants to Vocational Schools, Winners’ Peers Are

    • Less Likely to Attend College

    • Less Likely to Graduate

    • More Likely to Attend Remedial Programs

    • Attend Schools with Lower Fees

  • Voucher Winners’ Schools Also Appear to Have

    • Less Qualified Teachers

    • More Facilities on Campus

  • Same Differences are not Present Among Applicants to Non-Voucher Schools

Are voucher effects still present

Are Voucher Effects Still Present?

Are voucher effects still present1

Are Voucher Effects Still Present?

Key conclusions

Key Conclusions

  • Among Students Who Originally Applied to Vocational Schools, Voucher Winners . . .

    • Attended Schools with Worse Observable Characteristics

    • Had Higher Likelihood of Taking the ICFES College Entrance Exam

    • Had Higher Test Scores on ICFES Exam

  • Peer Effects cannot Explain Voucher Effects

Voucher mechanisms

Voucher Mechanisms?

  • Incentives

    • Vouchers were Renewable Conditional on Passing

    • Emerging Literature on Incentives (e.g. Kremer, Miguel, and Thornton 2005)

  • Attending School that Students Value More

    • Vocational Schools Increasingly Focused on Emerging Service Industry

    • Private Sector Has Adjusted Quickly to Changes in Labor Market

    • Differences in Apprenticeship Opportunities

    • Industrial versus Commercial Education Curricula

      • Limited Commercial Education Slots in Public Sector

      • Private Commercial Schools Retain Students

In conclusion

In Conclusion

  • Peer Effects are Important in Education

  • Disentangling Voucher and Peer Effects is Difficult

    • Need Unique Experiment where Vouchers Assign Students to “Worse” Peers

    • Applicants to Vocational Schools (PRIOR) to Colombian Voucher Lottery

  • Vocational Voucher Winners Attend Schools with “Worse” Peers

  • Vocational Voucher Winners Have Higher Academic Achievement Than Voucher Lottery Losers

  • Peer Effects May Not Explain the Voucher Effects

  • Other Mechanisms are Plausible

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