Tag: chile

Chile’s Proposed Education Reforms Would Kill the Goose that Lays the Golden Eggs

For the past three decades, Chile has had a nationwide voucher-like school choice program. Parents can choose among public and private schools, and the government picks up most or all of the tab. But, since the election last fall of a left-leaning government led by Michelle Bachelet, the future of the program has been in doubt. In May, President Bachelet introduced a first round of reforms aimed at dismantling aspects of the program, though these are still under debate. I’ve written about what that could mean for Chile’s educational performance and equality in today’s edition of the Santiago-based El Mercurio. Here’s the original English version:

Chile’s elementary and secondary education system has been harshly criticized in recent years for academic underperformance and for having large gaps in achievement between lower-income and higher-income students. There is significant truth to both charges. What is less widely known is that Chile has been improving substantially in both respects for at least a decade, and that president Bachelet’s proposed reforms are likely to reverse that improvement.

Though Chilean students perform in the bottom half of countries on the Programme for International Student Assessment (PISA) test, many of the nations that participate in that test are rich and fully industrialized. When compared to other Latin American countries, Chile is number one across all subjects. More importantly, Chile is one of the fastest-improving countries in the world on international tests, and so it is gradually closing the gap with rich nations.

Highlights of the New PISA International Test Results

The latest (2012) PISA results are out! PISA is a test of fairly basic, practical skills given to 15-year-olds around the world. Here are some of the highlights:

  • U.S. performance is essentially flat across subjects since 2003
  • Finland’s performance has declined substantially since 2003
  • Korea is continuing to improve, solidifiying its position as one of the highest performing nations
  • Already the highest-performing Latin American country, Chile has continued to improve, leaving the regional average further behind.

The U.S. story needs little elaboration. Neither the structure nor the content of American schooling has changed in educationally meaningful ways since 2003. We still have 50 state education monopolies, with a growing but still realtively small homogenizing federal presence.

The “Replicate Finland!” bandwagon was always misguided. It is simply not sensible to take a nation’s performance on a single test, in isolation, as evidence for the merits (or demerits) of its national education policies. There are too many other factors that affect outcomes, and there are too many important outcomes for a single test to measure. For those who nevertheless championed Finland as a model, the latest PISA results are a bit awkward (see, for instance, the book: The Smartest Kids in the World).

Though the Chilean student protests of 2011 and 2012 focused on the desire for free, universal college, the leaders of that movement also harshly criticized that nation’s universal K-12 private school choice program. About 60 percent of children in Chile attend private schools, most of them fully or substantially funded by the national government. One of the most famous protest leaders, Camila Vallejo, was recently elected to the Chilean congress as a member of the Communist party. The influence of Vallejo and her compatriots has shifted public sentiment against crucial aspects of the nation’s private school choice program, despite the fact that private schools themselves remain extremely popular with parents. It is quite possible that, in the coming years, Chile will unravel the very policies that have made it one of the fastest improving countries in the world and the top performer in Latin America.

The NEA has called for higher U.S. teachers’ salaries based on the PISA results, arguing that some of the top performing countries pay their teachers more relative to people in other careers. This is self-serving and scientifically dubious. The NEA presents no evidence for a causal link between overall teacher salaries and student performance, just a bit of random cherry picking that ignores countless confounding factors. To find the real link between average salaries and performance, we can look at domestic U.S. research on the subject. Hanushek and Rivkin, for instance, find that “overall salary increases for teachers would be both expensive and ineffective.” Not surprisingly, a recent review of Ohio’s data on teacher “value-added” and teacher pay finds an inverse relationship:

in Cleveland… teachers deemed “Least Effective” by the new state evaluation system earned, on average, about $3,000 more than the teachers deemed “Most Effective.”

There’s some evidence that tying teacher pay to student performance helps to improve learning, but that’s about it.

Finally, it’s important to remember that PISA is a test of everyday “literacy” in the three subjects it covers (math, reading, and science). If you want to know how well students are learning the specific academic content needed for continuing study at the college level, PISA isn’t your best choice. For that, take a look at TIMSS.

Would You Let a Quack Treat Your Child?

Cases in which parents deny their children modern medical treatment are increasingly rare. In medicine, the days of snake-oil selling quacks are mostly behind us. Sadly, the same isn’t true in education policy.

Medical researchers precisely define and test their proposed treatments. Compare that to a recent bit of education policy “analysis” in which the writer purports to assess Milton Friedman’s market-inspired proposal (minimally regulated school vouchers) by reviewing the outcomes of charter schooling. This is like testing insulin by administering Flintstones Chewables. Charter schools are opened and closed at the discretion of government authorities, lack market-determined prices, and cannot be operated for-profit or offer religious instruction. In many states, they cannot hire teachers who lack government credentials. Friedman’s voucher proposal shared none of these characteristics, and so to treat the two interchangeably is a sign of ignorance or intentional equivocation.

Even when relevant evidence is presented, the presentation is frequently inaccurate and unsystematic. To see just how serious this problem is, it helps to look at an example in detail. Consider a recent discussion of voucherizing U.S. federal education spending that drew lessons from Chile’s voucher program. Many of its facts are wrong, others are misrepresented, and key pieces of information are omitted.

The author claims that Chilean education spending as a share of GDP shrank between 1980 and today. But, according to the United Nations, it rose from 4.4 percent to 4.5 percent. And, due to the sustained growth of Chile’s economy since the mid-1980s, inflation-adjusted per pupil spending has more than doubled.

The author acknowledges that Chilean students are now the highest-performing in Latin America, but claims that his fabricated “budget cuts have led to overall decline in quality.” In fact, Chile is one of the fastest-improving nations in the entire world on international tests of academic achievement. He goes on to claim, without support, that vouchers have led to growing inequality, benefiting only upper-middle-income families, yet a Yale University study reports that the voucher program has reduced inequality in educational attainment and raised earnings equally for both the poor and the non-poor.

Finally, the author notes that lower-income students are more likely to attend public rather than private schools in Chile, but neglects to mention that public schools serving the poor receive a varying amount of additional funding that is not given to private schools serving similar students. Chilean economists Sapelli and Vial report that public schools receiving vastly higher funding per pupil outperform private schools (which explains their appeal), but in the rare cases in which the public sector’s funding advantage is 25 percent or less, it is private schools that perform better.

This is not an exhaustive list of the commentary’s errors, omissions, and misrepresentations, but it should suffice to show the level of quackery being doled out to the public by purportedly serious publications (it was published in the Washington Post’s education blog). We’re not exactly talking House or Doc Martin here.

Few parents would administer the medical equivalent of this claptrap to their children–they are generally protected from such errors by the health-care field’s comparatively careful, systematic research practices. But in education, they still suffer under the ministrations of charlatans. The result can be seen in the virtually unique productivity collapse that has beset American education for generations.

So what can we do about it? A first step would be for well-intentioned education policy analysts to make more systematic use of the high quality research that is available, and to add to that literature. But it is harder to conduct experiments on the impact of state or national policies than on the impact of drugs. Fortunately, there is a solution to this problem–one that we also owe, incidentally, to the medical field. I’ll be writing about that soon, and will update this post with a link when it’s available.

Update: My article in the Washington Post’s Answer Sheet blog.

The U.S. Takes a Dive in Economic Freedom of the World Index

Economic freedom in the United States has plummeted to an all-time low. According to the Economic Freedom of the World: 2012 Annual Report, co-published today with the Fraser Institute, the United States’ ranking has dropped to 18th place after having ranked 3rd for decades up to the year 2000. The loss of freedom is a decade-long trend—the United States ranked 8th in 2005—that has accelerated in recent years.

Virtually every U.S. indicator has seen a deterioration. Government spending and regulations have grown, the rule of law and protection of property rights have weakened, and foreign investment and non-tariff barriers have increased. Authors James Gwartney, Robert Lawson, and Josh Hall note some of the reasons for the decline, including the war on terror and the growth of crony capitalism.

As the graph below shows, the United States now has a lower economic freedom rating than it did in the 1970s.

The United States’ fall is alarming not only because it’s the most important economy in the world, long associated with market-liberal policies, but also because Economic freedom is strongly correlated with prosperity, higher growth, and improvements in the entire range of standard-of-living indicators, so a decline negatively affects those outcomes. The authors calculate, for example, that the loss of economic freedom will cut long-term U.S. growth by half to about 1.5 percent per year.

Another country that has seen a notable, steady drop in its economic freedom is Venezuela, now ranked last in the index. Other countries have been on an upward trend. Chile is now ranked 10th and China, while still largely unfree, continues to head in the right direction (see graph).

Below are the top ten countries in this year’s index. You can see a full listing here on page 10.

As my colleague Richard Rahn says in his column today, this year’s economic freedom report should be a wake up call to all Americans.

Paul Krugman’s Distorted Views on Inequality in Latin America

When it comes to discussing Latin America, Paul Krugman has a tortuous relationship with facts. Let’s take a look at a post he wrote last week on inequality in the region. Krugman claims that Latin America’s decline in inequality in the last decade is due to the region “partially turning its back on the Washington Consensus” (a term that has misleadingly become short hand for free market policies). Is that the case?

First, note how the graph in Krugman’s post actually shows inequality going up in Latin America during the 1980s, before the implementation of policies related to the Washington Consensus (which for most countries begins in the early 1990s), and then sharply declining before the arrival of what he calls the “new policy approach” of left-of-center governments. The rise of inequality in Latin America in the 1980s coincides with the periods of hyperinflation that crippled the economies of Argentina, Brazil, Nicaragua, Peru, and Bolivia. Central banks in Latin America were all too busy in those years financing the acute fiscal imbalances of their central governments through the emission of money. And Latin American countries were deep in the red precisely because their bloated public sectors became unsustainable, leading to the serious debt crisis of 1982. Thus, it was an inflationary spree, caused by the crisis of big government, that exacerbated inequality in the region. Of course, Krugman fails to mention this.

Can we assign the recent decline in inequality in Latin America to any specific ideology? A recent study by Kenneth Roberts of Cornell University on the politics of inequality in Latin America looked at inequality trends from 2000 to 2010 and found that “countries that experienced net declines in inequality were governed by diverse administrations of the left, centre, and right, including non-leftist governments in Colombia, Mexico, Peru, Paraguay, El Salvador, Guatemala, and Panama.” According to Roberts, “there was no strict correspondence between declining inequality and either the ideological profile of national governments or any specific set of redistributive initiatives.”

Second, it’s quite a stretch to state that Latin America as a region moved away from the Washington Consensus. I’m not going to dwell here on the virtues of all the policy recommendations identified by John Williamson back in 1989 or discuss the extent to which they were actually implemented by the various Latin American governments. However, even though some countries such as Venezuela, Ecuador, Bolivia, and Argentina have turned their backs on responsible macroeconomic policies in the last few years, most governments in the region, including those called “left of center,” still implement macroeconomic policies related to the Washington Consensus such as freer trade, fiscal and monetary discipline, and attraction of foreign direct investment.

It is telling that despite the serious deterioration in economic freedom in countries such as Venezuela, Ecuador, and Argentina economic liberty has actually increased—slightly—in Latin America as a region in the last decade. According to the Economic Freedom of the World , Latin America went from a regional average grade of 6.56 (out of 10) in 2000 to 6.62 in 2009. Implying that Latin America has somehow turned its back on market-friendly policies is misleading.

Third, Krugman looks at the economic performance of Latin American governments based on their ideological affiliation, suggesting that social democratic regimes have a better record than non-left-of-center governments. However, the study on which he bases his post relies too heavily on analyzing governments by their ideological labels, rather than looking at their actual economic policies. This can be very misleading. For example, during the period covered by the study (2000s), Chile is ranked as left of center, even though during that decade the country increased its level of economic freedom, moving up in the ranking of the Economic Freedom of the World index from 28th place in 2000 to 5th in 2009.

Finally, Krugman finished his post questioning Chile’s free market model and private pension system (even though the study he was referencing categorizes Chile as “left of center” and thus credited that ideological camp for Chile’s healthy economic indicators). Krugman doesn’t provide evidence to substantiate his criticism other than making a presumable reference to the recent student protests in Chile. If he looked at the facts, he would see a different picture. He would find that Chile is the country with the most impressive record in poverty reduction in Latin America (the poverty rate fell from 45 percent in the mid-1980s to just 15 percent in 2011), that it has tripled its income per capita since 1990 to $16,000 (the highest in Latin America), and that it is set to become the first developed nation in Latin America within a decade. What is it about this record that Krugman finds so annoying?

Palestine To Adopt Chilean Private Pension Model

Hashim Shawa, the head of the Bank of Palestine, says that in 2012 Palestine will adopt the private pension system that Chile pioneered 30 years ago and has exported throughout the world. As you can see from the map below, it will become the second Arab territory after Egypt to do so. Of course, the devil is in the details, and for the reform to be as successful as it has been in Chile, Palestine should introduce a whole set of complimentary economic reforms. But if done right, at least in this regard Palestinians will be ahead of almost all of their neighbors, including Israel.

Here’s Where Better Schools HAVE Scaled Up…

Earlier this summer, I released a study comparing the performance of California’s charter school networks with the amount of philanthropic grant funding they have received. The purpose was to find out if this model for replicating excellence was consistently effective. The answer, regrettably, was no.

But a new study we are releasing today finds that there is at least one place where better schools HAVE consistently scaled-up: Chile. Thanks to that nation’s public and private school choice program, chains of private schools have arisen, and they not only outperform the public schools, they also outperform the independent “mom-and-pop” private schools.

For anyone interested in replicating educational excellence, this study by a team of Chilean scholars is worth a look.