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Equity and Educational Performance
Improving education has become widely recommended as crucial for policies to promote growth and improve income distribution. 1 Most of the studies carried out in Latin America reveal problems with both quality and equity in education. This has led governments to implement a range of educational policies and to significantly increase the resources going to education. However, they have not always obtained the hoped-for results.
Interest in improving education has thus produced a far-reaching debate about the policies most suitable to improving its quality. At the same time, the implementation of standard educational performance tests in several Latin American countries has permitted the development of a growing body of literature that attempts to quantify the effects of specific policies on the quality of education. Nonetheless, these studies, along with those carried out in developed countries, often produce conflicting results.
In this paper, we review the main issues under discussion in the field of economics of education, with a special focus on Latin America. We seek to organize the debate about educational policies by showing how these policies respond to different models based on different assumptions and hypotheses about how the educational system functions. Methodological and informational problems make it difficult to test the validity of the results of different policies. This would explain the enormous number of studies in the field that conclude with conflicting policy prescriptions. [End Page 219]
This paper is organized as follows. We begin by discussing the quality of education in Latin America. We then review the main educational policy issues and the different models under which we can group the educational policies currently being discussed. This same section examines the extent to which the different policy prescriptions are supported empirically. In an effort to explain the enormous range of conflicting results, the next section discusses the methodological difficulties facing empirical studies that attempt to determine the factors affecting educational outcome and evaluate the results of specific policies. We then use data from Chile to analyze the importance of the school in educational outcome and to explore the heterogeneous impacts of student and school characteristics on educational achievement. The final section summarizes our main conclusions.
The Quality of Education in Latin America
One of the first clues that Latin America's educational level was lagging behind involved the stagnation in the population's average years of schooling. Barro and Lee point out that while in the 1960s Latin American countries averaged more years of schooling than other developing countries, by 1990 the countries of eastern Asia and the Pacific were averaging almost one year more of schooling than Latin American countries. 2 The latest data from Barro and Lee confirm this trend (see table 1). 3
The implementation of standardized student achievement tests at national and international levels has confirmed that tendency. Over the past twenty years, many Latin American countries have established national systems for measuring the quality of education. 4 UNESCO has applied comparative tests in several of the region's countries, and it is [End Page 220] precisely in the context of the UNESCO laboratory that some of the systems for measuring educational performance in Latin America have been developed. More recently, some Latin American countries have started participating, although shyly, in international tests for measuring educational results.
All these evaluations have led to a single result: the quality of education in Latin America is low and unequal. Latin American countries perform below average on international tests; a high percentage of students are low achievers on their national performance tests; there is a high variance in educational performance within each country, where the richest income decile of the population mainly attends private paid schools, with better results. 5
International Test Results
Only two Latin American countries have participated in international tests: Colombia and Chile. 6 The results of these tests support the hypothesis of the poor quality of education in Latin America. In the third international mathematics and science study (TIMSS), applied between 1994 and 1995, Colombia placed...