• Economics and education

Economics of education

The private provision of educational services at tertiary, secondary and primary levels has been expanding in Latin America in recent decades. The low quality of public provision of education is given as the main reason for the expansion of private service provision. This paper analyses different impacts of public sector and private sector education provision on the labour markets by exploring private-public differences in the individual returns to education in Urban Peru. It looks at education provision at primary, secondary, technical tertiary and university tertiary and measures the differences in labour earnings for all possible educational trajectories

The paper finds that:

• those who attended private schools have higher returns to education than those who attended the public system
• the higher returns are more prominent at the primary and secondary education level emphasising the role of early investments in human capital formation
• private-public differences have been increasing for younger generations, while older cohorts do not show significant private-public differences in returns to schooling
• those who graduated from public school are more likely to be inactive and to be unemployed than their private counterparts
• results are consistent with educational investment patters in Latin America
• the educational system has been expanding its coverage, but with low levels of public investment
• poorer families send their children to public schools
• presence of children from underprivileged households in the public classroom, paired with the deterioration of public spending, implies a reduction of the quality of learning in public schools. As a result, the socio-economic profile of the public classroom has deteriorated
• expansion of private provision of educational services has meant that children from less-underprivileged families were able to attend private rather than public schools
• the gap between students from public schools and students from private schools is increasing due to the deterioration of two elements: the quality of the educational services provided by public school and the socio-economic conditions of the children who attend public schools.
  

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