How can progressive vouchers help the poor benefit from school choice? Evidence from the Chilean voucher system

Abstract

This paper considers a major educational reform in Chile that increased vouchers by 50% for students in the lowest 40% of the income distribution. This increased the revenues schools received for these students and lowered the relative prices of private voucher schools for eligible parents. I use a national dataset to implement an RDD exploiting that eligibility is a discontinuous function of a socioeconomic ranking. Results reject that eligible students chose schools with higher test scores or socioeconomic status, and that they are doing better than noneligible students in math and language test scores.