To profit or not to profit? Evidence from Chile’s for-profit voucher schools

Abstract

This note examines whether for-profit management affects educational outcomes in Chile’s voucher system. Using administrative panel data for all voucher-subsidised primary schools from 2010 to 2014, we compare for-profit and nonprofit schools in terms of inputs and student performance. For-profit schools serve more disadvantaged students and rely on lower-cost inputs, such as less-qualified teachers, but they also provide more instructional hours and smaller classes. After controlling for student characteristics, a significant performance gap remains, but it is largely explained by differences in school inputs rather than by ownership form itself. These results suggest that for-profit management affects educational outcomes primarily through differences in input choices.