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Lessons from the PACES Voucher Program in Colombia

Lessons from the PACES Voucher Program in Colombia. Eric Bettinger, Case Western Reserve November 17, 2005 Federal Reserve Bank of Cleveland. BACKGROUND: WHY VOUCHERS? WHY COLOMBIA?.

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Lessons from the PACES Voucher Program in Colombia

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  1. Lessons from the PACES Voucher Program in Colombia Eric Bettinger, Case Western Reserve November 17, 2005 Federal Reserve Bank of Cleveland

  2. BACKGROUND: WHY VOUCHERS? WHY COLOMBIA? • As in many LDCs, Colombian enrollment rates drop sharply between primary and secondary grades, especially for the poor. • As is in other LDCs, private enrollment in Colombia is substantial, even for low-income children. • Public school quality is low, with poorly trained teachers, and a shortage of secondary school spots. • This generated calls for demand-side financing initiatives such as vouchers.

  3. Enrollment Rates in Colombia, 1993 Source: Sanchez and Mendes, 1995

  4. THE PACES VOUCHER PROGRAM • Objectives • Increase enrollment and attainment • Part of a general reform/decentralization • Rules • Applicants entering 6th grade; under 16; attended a public primary school; admitted to a participating private secondary school • Renewable through graduation conditional on academic progress • Awarded by lottery when over-subscribed • Gold Standard in Research • Simplicity

  5. PROGRAM DETAILS • Ran from 1992-97; 125,00 vouchers awarded • Elite private schools opted out; participating schools about like public • Voucher and tuition amounts • Private school fees ran about US$350/year in 1998 (for PACES applicants in our data), as did public expenditure/pupil • The voucher was worth about US$190

  6. SOURCES OF FOLLOW-UP INFORMATION • Complete and accurate follow-up is the holy grail in research on education interventions • Samples of adults rarely capture information on respondents’ childhood school environment • Children are difficult to track; families are highly mobile • We collected data using a survey, achievement tests, and administrative records from college admissions testing (ICFES)

  7. TIMELINE Bogotá 1995 applicants (Calendar “A” school year) Date Activity Grade (w/no repetition) CY 1994 Apply Feb. 1995 Start school 6th Feb. 1996 Start school 7th Feb. 1997 Start school 8th Feb. 1998 Start school 9th Feb. 1999 Start school 10th Take ICFES exam Feb. 2000 Start school 11th Feb. 2001 College

  8. PREVIOUS RESULTS (SURVEY) • Private School Attendance • Voucher Winners More Likely to Attend Private School • 94 Percent of Unsuccessful Voucher Applicants Attended Private School in Year After Lottery • By three years, 54 percent of “Control” Group and 70 percent of “Treatment” Group in Private Schools. • Educational Attainment • Voucher winners had completed 0.2 years more of schooling • No differences in dropout rates • Large differences in grade repetition • 25 percent less likely to have repeated 6th grade • Voucher Winners Score One Grade Level Higher on Standardized Exams • Results are Robust to a Variety of Statistical Specifications

  9. LONG RUN CONCERNS • Effects Observed after 3 Years • 1/2 of Voucher Winners No Longer Using Voucher after 3 Years • No Difference in Attendance Rates • Ambiguity of repetition result. • Reliance on Survey Data and Response Bias • Response Rates around 55%

  10. WHY ADMINISTRATIVE RECORDS? • All college entrants and most high school grads take the ICFES college entrance exams. We use ICFES registration status and test scores as an outcome. • Advantages: • Long-term outcome of major significance • No need to survey; no loss to follow-up • Disadvantages: • Score outcomes may be hard to interpret • Differential record-keeping by win/loss status may generate a spurious treatment effect

  11. EVALUATION STRATEGIES • ICFES registration to proxy high-school graduation • Matching Strategies • Importance of Accurate Record Keeping and Randomization • Key Results: • 30 Percent of Voucher Applicants Take ICFES Exam • Voucher winners 7 Percentage Points More Likely to Take the ICFES Exam

  12. EVALUATION STRATEGIES (cont.) • Conditional-on-registration score effects • We look at test scores among those who were tested. • These are clearly contaminated by selection bias since vouchers affect testing probability. • The resulting bias probably masks positive effects; we consider a number of selection corrections

  13. EVIDENCE FOR NEGATIVE BIAS • In our 2002 study, the likelihood of taking our test is the same by win/loss status (since we tested everyone) • Voucher Winners Scored One Grade Level Higher • Limiting this sample to the 44% of tested students who also took the ICFES does not generate any voucher effect • Students who would not have taken the college entrance exam but do so because of the voucher have lower ability than other students who took the exam

  14. Correcting the Bias? • Difficult Statistically • Make Assumptions about Non-Takers • Create Upper and Lower Bounds • Possible to Estimate the Effect at Different Points in the Distribution • Effect of Voucher on Test Scores on Average • Effect of Voucher on Students above the 90th percentile • Above the 75th percentile • Key Results: • Voucher Winners Score Higher on Average and at Each Point in the Voucher Distribution

  15. Voucher Mechanisms • Private Schooling • Change in Peer Groups • Income Shocks • Student Incentives • Other Mechanisms?

  16. Vocational School Voucher Applicants • Voucher Losers switch to Academic Schools • Voucher Winners 18 percentage points more likely to be in Vocational School • Vocational Schools had inferior quality • Lower ICFES scores • Lower Proportion of Students Eventually Taking ICFES • Voucher winners have better ICFES outcomes

  17. CONCLUSIONS Angrist, et al (2002): Voucher winners completed more schooling; much of this is due to reduced grade repetition. Winners’ more likely to take college entrance exam (5-7 pts) and hence to graduate high school. This suggests additional learning and lasting benefits. Naive score contrasts are compromised by selection bias. Corrected estimates show a strong treatment effect (~.2σ); non-parametric corrections generate similar results. Voucher may not affect students through school quality. Voucher winners who had applied to vocational schools perform better on ICFES despite lower quality schools.

  18. Postlude • Power of Randomization • Difference is Randomization and Careful Record Keeping • Administrative Data and Follow-up • Colombia as a Pioneer in Implementing Social Policy Allowing for Randomization • World Bank’s Implementation Strategies

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