Using School Scholarships to Estimate the Effect of Government Subsidized Private Education on Academic Achievement in Chile

This paper estimates the impact of private education on low-income students in Chile. We attempt to reduce selection bias by using reduced-tuition paying, low-income students in private schools as the treatment group, based on our finding that these students were, to some extent, randomly selected out of the public school control group. Propensity score matching is then used to calculate the difference in academic achievement of students in the treatment group versus their counterpart in the control group. Our results reveal that students in private voucher schools with tuition score slightly higher than students in public schools. The difference in standardized test scores is approximately 8 points, a test score gain of almost 0.15 standard deviations.