School Vouchers, Labor Markets and Vocational Education

Abstract

We provide evidence on the long-run impact of vouchers for private secondary schools, evidence collected twenty years after students applied for the vouchers. Prior to the voucher lottery, students applied to either an academic or vocational secondary school, an important mediating factor in the vouchers' impacts. We find strong tertiary education and labor market effects for those students who applied to vocational schools with almost no impact on those who applied to academic schools. The labor market gains for vocational students are strongest at the top of the distribution and null at the bottom of the distribution. We find additional longrun impacts on consumption, and teen-age fertility. The expected net present value of benefits to participants and to taxpayers was large and positive implying that the program was welfare improving unless net externalities were large and negative.

Using Randomized Controlled Trials to Estimate Long-Run Impacts in Development Economics

“…Moreover, a non-trivial portion of participants are still receiving tertiary education, and that portion is significantly higher in the treatment group, raising the possibility that treatment effects may grow over time. This pattern is particularly important if we believe that, as Bettinger et al (2018) showed, gains from these programs tend to be concentrated at the top of the distribution. The authors caution that while these results indicate positive private returns to education to the extent that education simply helps people get access to jobs with rents, it may not generate similar social returns.…”

“…For instance, direct investments in child health, such as deworming (Baird et al, 2016a), nutritional supplementation (Hoddinott et al, 2008), and perinatal interventions (Charpak et al, 2016) have all been found to generate meaningful impacts on adult labor productivity. Certain investments in education, including cognitive stimulation in early childhood Kagitcibasi et al, 2009) and scholarship programs (Bettinger et al, 2018) also yield positive returns. Interventions that aim to improve child education, nutrition and health by leveraging a conditional cash transfer similarly appear to have persistent effects on earnings in some cases (Barham et al, 2017), although not in others: Molina Millán et al (2018b) find no meaningful impacts, possibly because their sample population is still relatively young.…”

“…As we survey here, these tend to show both meaningful gains in educational attainment and subsequent benefits in the labor market. Bettinger et al (2018) evaluate the PACES voucher program in Colombia. The program used a lottery to assign vouchers for private secondary schools among applicants from public elementary schools in the poorest two socioeconomic strata in Colombia.…”

Using RCTs to Estimate Long-Run Impacts in Development Economics

“…For instance, direct investments in child health, such as deworming (Baird et al, 2016a), nutritional supplementation (Hoddinott et al, 2008), and perinatal interventions (Charpak et al, 2016) have all been found to generate meaningful impacts on adult labor productivity. Certain investments in education, including cognitive stimulation in early childhood Kagitcibasi et al, 2009) and scholarship programs (Bettinger et al, 2018) also yield positive returns. Interventions that aim to improve child education, nutrition and health by leveraging a conditional cash transfer similarly appear to have persistent effects on earnings in some cases (Barham et al, 2017), although not in others: Molina Millán et al (2018b) find no meaningful impacts, possibly because their sample population is still relatively young.…”

Social interventions, health and wellbeing: The long-term and intergenerational effects of a school construction program

“…First, a vast literature in economics has documented the long-term effects of different types of social interventions on multiple dimensions of human capital outcomes, mainly in high-income countries (see Almond et al, 2018 for a review of this evidence). There is also emerging evidence from lower income countries on the long-term effects of interventions, which mainly analyzes demand-side educational interventions such as conditional cash transfers (Parker and Vogl, 2018), vouchers (Bettinger et al, 2017) and compulsory schooling laws (Agüero and Ramachandran, 2018). We add to this literature by examining the long-term effects of a common supply-side educational intervention in the form of school construction that aims to improve schooling access.…”