Effects of differentiated school vouchers: Evidence from a policy change and date of birth cutoffs

This paper studies the effects of an increase in school choice by examining a 2008 reform that made the value of Chile's (previously flat, universal) school voucher a step function of student income. This policy increased the number of private schools that low income children could access free of charge. I identify the impact of the policy by combining its introduction with variation from a date of birth enrollment cutoff. I show that the differentiated voucher lowered, but only slightly, the probability that students used public schools. Students more likely to move to private schools experienced better school characteristics but no increase in test scores. Further analysis suggests a rise in test scores for students most likely to stay in public schools. These results suggest that the effects of the policy on test scores were caused by responses from public schools, instead of by the re-sorting of students into private schools.