Chile introduced a nationwide school voucher in the early 1980s, under the military government of Augusto Pinochet, and paid every pupil the same flat amount wherever they enrolled. That single design choice gave schools an incentive to enrol pupils from economically advantaged families.
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What the voucher changed
Pinochet’s government decentralised the public school system, handing control to municipalities, and introduced the flat, per-pupil payment that both municipal and non-fee-charging private schools could claim. Elite private schools that charged their own fees kept operating outside the state-funded system entirely.
Private enrolment grew fast. In 1979, 12% of Chilean pupils attended private schools that received public money, and a further 7% attended private schools with no state funding at all. By 1990, 32% of pupils were in private voucher schools. By 2009, that share had reached 48%, and including private schools outside the voucher system, 56% of Chilean pupils were in some kind of private education.
The voucher paid the same amount regardless of a family’s income. Researchers Alejandra Mizala and Florencia Torche found that this flat design created incentives for schools to enrol students from economically advantaged families.
Most of these voucher schools stand alone. More than 70% of Chile’s private voucher schools are independent, and the rest belong to networks run by one owner, known as a sostenedor. A study by Gregory Elacqua and colleagues found that pupils at network schools outperform those at comparable independent schools. The independent schools, in turn, score about the same as public ones.
Co-payments widened the gap
Most private voucher schools also used a mechanism called “shared funding”, which let them charge families a tuition top-up on top of the state voucher without losing their public subsidy. Around 80% of private voucher schools used shared funding. The co-payment added a price mechanism among schools, directly linked to the socioeconomic status of their pupils.
The Conversation reported that this co-payment system has been linked to Chile’s high and rising socioeconomic school segregation. Among countries in the Organisation for Economic Co-operation and Development, Chile’s is the highest. There is no evidence that co-payments improved the quality of Chilean education. Schools also used selection practices during admissions, weighing a pupil’s past performance, predicted future performance, behaviour and family income, practices that were especially common in private institutions that still received state funding. Bachelet’s General Education Law partly regulated these selection processes in 2009.
A later fix, and its limits
Chile’s flat-voucher design lasted until 2008, when the government adjusted voucher values according to a pupil’s poverty level and the proportion of poor pupils at each school. Mizala and Torche found that the change had a positive and significant effect on maths and language test scores. The effect was much larger at private voucher schools serving poor children, and it grew in the years after the policy took hold. Their conclusion: moving from a flat to a means-tested voucher improved both achievement and equality.
The broader shift away from Chile’s market-based model came later still. After her re-election, President Michelle Bachelet sent parliament a package of reforms aimed at ending public funding for for-profit schools and making primary and secondary education free. The package also banned the selective admissions practices schools had used for decades. The push followed a student movement that began in 2006, has been continuously active since 2011, and demanded exactly this kind of change.
By then, evidence had accumulated that Chile’s for-profit schools were less effective than non-profit ones. Some private universities, meant to be non-profit, used related companies to return profits to their owners. A parliamentary commission had identified these practices as far back as 2011. By the time of Bachelet’s reforms, Chile had the highest socioeconomic school segregation among OECD countries, and ending the co-payment was meant to reduce it.
