The Market Returns to Private High Schools: Evidence from Mexico

Type Working Paper
Title The Market Returns to Private High Schools: Evidence from Mexico
Author(s)
Publication (Day/Month/Year) 2010
URL http://www.iza.org/conference_files/worldb2011/binelli_c2867.pdf
Abstract
Despite the strategic importance of the private sector to education policy reform in developing countries, very little is known on the relative e¢ ciency of private and public schools in boosting educational attainment and wages. This paper Ölls this gap by building a unique dataset for Mexico that allows measuring the market returns to private high schools. The e§ect of private schooling is identiÖed by a novel identiÖcation strategy that exploits the signiÖcant increase in the availability of public high schools and private colleges by State and year observed in Mexico in the 1990s. We Önd substantial evidence of a positive e§ect of private schooling on college completion and wage returns. These Öndings question the e§ectiveness of the public sector as an e¢ cient education provider and point at the private sector as a viable alternative to absorb the increasing demand for schooling. The tradeo§ between increased access to education and equity in as far as quality and cost di§erences persist between private and public schools is discussed.

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