Chile’s new president, Michele Bachelet, is out with her promised education reforms, which are paid for by increased taxes on the corporate sector. But they’re not very smart.
In the 1980s, the Chilean government introduced a voucher system to encourage competition in the school system. This system gives students the option to pay a small fee to attend “voucher schools” (which are distinct from public and private schools), with the bulk of their tuition covered by the government. By 2000, roughly half of Chilean students attended these voucher schools.
All in all, this system produced pretty good outcomes for students. Since 2000, Chilean students have improved steadily on the Program for International Student Assessment (PISA), an international test in math, science, and literacy. In fact, Chilean students continued to improve in the most recent PISA test, far outpacing the regional average.
The new education reforms, however, would disrupt the entire system by preventing voucher schools from charging any additional tuition fees. This would create a price ceiling for voucher schools that would not allow them to pay for, say, better teachers or expanded services.
These moves would hurt Chile’s middle- and lower-income students the most. The privatization and voucher system have opened up private, competitive schools to more lower- and middle-income Chileans. Meanwhile, attendance rates have fallen for public schools. The mobility introduced by the voucher system also created market pressure on failing public schools to improve their services. The effective price ceiling created by Bachelet’s reforms would hurt the most disadvantaged students in the education market.
In addition, Bachelet’s ultimate goal is universal, state-paid college tuition, which would potentially increase the tuition costs paid by the state and reduce the role of private institutions. This would reduce competitive cost-cutting and the quality of learning. It would also expand the public deficit.
Bachelet is certainly allowed to tackle education reform, but reducing competition and eliminating choices is the wrong way to do it. Instead, Bachelet should stick with the competition and economic freedom that has turned the country into the richest, most educated nation in Latin America.
Ashley Wright, Andrea Rodriguez, and George Margulies are currently members of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, pleaseclick here.
