Effects of spatial competition on public educational efficiency: an analysis for the Chilean Metropolitan Region

ABSTRACT

This study analyzes the effect of spatial competition on public schools’ efficiency in Chile, an extreme case of market-oriented reforms in the educational sector. To address this issue, we use a measure of competition that captures three major characteristics of market competition in a spatial context: the number of competitors, based on distance buffers; the size of competitors, measured by the enrollment of voucher schools; and the geographical distance among public schools and their competitors. To control for the potential endogeneity of our measure of spatial competition on public schools’ efficiency, we use an instrumental variable based on the discontinuites generated by admissions municipality boundaries . We do not find evidence that public schools’ efficiency increases or decreases as the result of the increment of voucher schools located near to public schools, an increase in the enrollment of existing voucher schools, or both factors simultaneously. This result is robust to: (1) the limit of education market or other measures of spatial competition; (2) the methodology used to compute the efficiency measures; and (3) whether we explain efficiency or educational performance.

KEYWORDS:

• Educational vouchers
• public efficiency
• spatial competition
• Chile

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. The degree of competition promoted by market-oriented policies incentives school stratification, where the middle-income class by using social, economic, and cultural capital, might have a strategic school choice behavior, reshaping the schooling landscape to ensure social reproduction (Boterman, 2019; André-Bechely, 2007).

2. This approach refers to input-oriented technical efficiency. Under this framework, the inefficiency is the difference between the production plans of each unit (schools), and the optimal production frontier drawn with a specific technology function (Lovell 1993; Kumbhakar, Wang, and Horncastle 2015).

3. A possible explanation is the simultaneity between efficiency and competition, which implies the use of more rigorous empirical strategies.

4. For further background see Marcel and Raczynski (2009), Raczynski and Salinas (2008).

5. For more information see http://bcn.cl/1uv1u

6. For more information see http://bcn.cl/1uvx5

7. This law seeks to transfer public education responsibility from 345 municipalities to 70 SLEs throughout the national territory by 2025.

8. SIMCE is a standardized test applied to students in primary and secondary education in Chile. This test has the objective of measuring the learning assessment in some curriculum areas, such as Reading (Spanish), Mathematics, Natural Science and History.

9. According to Raczynski and Salinas (2008), scholar subsidies are the primary source of schools’ financing. Using the National System of Municipal Information (SINIM; Sistema Nacional de Información Municipal) we find that the state’s average subsidy to public schools in the metropolitan region was over 42% for 2016, 2017 and 2018, respectively.

10. We also make IV estimates by grade. Results are in line with our main hypothesis for mathematics in the sense that spatial competition does not have an important effect on efficiency of public schools regardless of the grades considered. For reading, it seems to exist a negative impact on lower grades, but a non-significant effect for higher grades.

Additional information

Notes on contributors

Camilo Quintero-Fragozo

Camilo Quintero-Fragozo is an Economist and Postgraduate student of Applied Economics with mention in Regional Studies at the Universidad Católica del Norte (Antofagasta, Chile). His research interests are education economics, spatial inequality, and public policies.

Yasna Cortés

Yasna Cortés is an Assistant Professor at the Universidad Católica del Norte (Antofagasta, Chile). Her research interests include urban policies, geography of education, and spatial inequality.

Mauricio Sarrias

Mauricio Sarrias is an Assistant Professor at the Universidad de Talca (Talca, Chile). His research interests include applied econometrics, health economics, subjective well-being, regional economics, and computational methods and software development.