Public Education Expenditures and Private School Enrollment

Produced by: 
University of Sao Paulo
Available from: 
September 2014
Paper author(s): 
Fernanda Estevan
Topic: 
Education - Health
Fiscal Policy - Public and Welfare Economics
Year: 
2014

In this paper, I investigate whether increases in public education expenditures lead to reductions in private school enrollment. In order to deal with the endogeneity of public expenditures, I use as a natural experiment the 1998 FUNDEF reform in Brazil that caused exogenous variations in local public school funding. Using data from Brazilian School and Population Censuses, I show that public education expenditures increases are associated with reductions in the share of private school enrollment for Grade 1. However, the effect is smaller for Grades 2 to 4, which is consistent with the existence of costs associated with switching schools.

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