CHILEAN EDUCATION SYSTEM REFORMSCHOOL AND TEACHER INCENTIVES

Emilio Chávez-Herrerías and Kate Placewith Isabel Bescos

Source: MINEDUC

RESEARCH QUESTION

How have education reforms after the return to democracy (1990) altered the incentives for schools and teachers to address (or not) quality and equity issues in basic education?

WORKING HYPOTHESIS

Pinochet regime (1973-1990) established the foundation of the system and its structure of incentives.

The Concertación governments (1990-2010) maintained that system, but introduced gradual changes to the structure of incentives to improve the quality and equity outcomes.

Overall, the incentives for teachers and schools have resulted in quality gains, but have also exacerbated inequality.

WHAT ARE INCENTIVES?

Factors that motivate or induce agents (school

administrators, teachers) to opt for particular behaviors or

courses of action that align with the interests of principals

(policy-makers).

ANALYTIC CLASSIFICATION OF INCENTIVES

Positive(reward desired

behaviors)

Negative(deter undesired

behaviors)Material

(affect benefits or costs)

-Performance bonuses

-Per-pupil subsidies

-Fines

-JailSymbolic

(affect formal or informal social

status)

- Promotions

- Accreditation

-Dismissal

-Revoking of accreditation

These distinctions might be blurry in practice!

MAIN ASSUMPTION

Incentives are important: successful implementation of policies depends on the right structure of incentives.

HOWEVER…… there can also be perverse incentives that induce undesired behaviors, that hinder the principal’s interests or generate unintended consequences.

… constant multidimensional reforms (such as in Chile) can obscure their actual impacts.

… incentives are not all that matters! There are other important reforms (that we do not address) and non-policy factors (such as values and political culture).

… notice that all this is based on a top-down conception of educational policymaking and implementation, and an instrumental view of most actors in the system.

WHAT WE ATTEMPT TO DO Characterize baseline structure of incentives and

performance of the system (Pinochet’s legacy)

Analyze the changes in the structure of incentives introduced by the legal and policy reforms between 1990 and 2010

Analyze the trends in the main performance indicators (quality and equity) and identify possible correlations with incentive reforms.

Review studies that assess the impacts of these reforms (causality?)

Sources of information: (i) general assessments of the Chilean education system and its reforms, (ii) statistics on the performance of the system, (iii) laws and policies, (iv) impact evaluations of reforms.

In 1920 the law 3.645 (compulsory primary education… schools could be public, municipal or private) provided:

School incentives: Subsidies to municipal schools and free private schools, with formulas

that incentivized attendance (Arts. 42 – 44) Sanctions for non-compliance with subsidy requirements (Art. 45)

Teacher incentives: Salary ladder that rewarded years in tenure and exam approval (Art.

50, 65) Mandated all municipalities to grant monetary awards to their best

male and female teachers (Art. 93)

INCENTIVES ARE NOT A NEW THING

Source: Ley 3.654 de 1920, que norma la educación primaria obligatoria.

Source: Source: ERS International Macroeconomic Data Set, Retrieved from www.usda.gov

Concertacion

Seba

stiá

n Pi

ñera

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000Economic and political overview of Chile, 1969-2010

ChileLatin America

Year

GD

P pe

r ca

pita

, 200

5 U

SD (

thou

sand

s)

Salvador Allende

Edua

rdo

Frei Pinochet

Dictatorship

1980

Co

nstit

utio

n

Michelle Bachelet

06-10

Ricardo Lagos

2000-06

Eduardo Frei94-2000

Patricio Aylwin 90-94

SCHOOL-LEVEL INCENTIVES

LAW OF SUBSIDIES TO PRIVATE SCHOOLS (1980)

Purpose: Regulate public subsidies to private schools that provide free primary or secondary education (Art. 1), aiming to create, sustain and expand schools with an "adequate educational and cultural environment" (Art. 2).

Municipal schools may also receive subsidies (Art. 18).

Source: Decreto de Ley 3.476 de 1980, que norma a los establecimientos de enseñanza particular subvencionados por el Estado.

LAW OF SUBSIDIES TO PRIVATE SCHOOLS (1980)Positive Negative

Material

• Monthly subsidy by student increases for higher grades (Art. 4)

• Higher subsidies for schools located in certain zones (Art. 5 )

• Formula incentivizes schools to maximize attendance (Art. 6)

• Voluntary donations not deducted from subsidies. Schools must disclose this information (Art. 10)

• Subsidized schools may charge voluntary fees to parents, 35% of these are deducted from subsidies (Art. 15)

• Subsidized secondary schools may charge parents up to 20% of a monthly subsidy as annual enrollment fee (Art. 15)

• Education-related income of schools is tax-deductible (Art. 11)

• Additional subsidy for providing free board (Art. 13)

• MINEDUC may require material guarantees to enforce compliance (Art. 8)

• Violations sanctioned with fines, suspension or cancellation of subsidies, or jail. Grave violations include altering enrollment figures or any other subsidy-related information, as well as not informing parents and MINEDUC about fees (Arts. 9 and 18).

Symbolic

• Grave violations sanctioned by revoking the status of subsidy recipient to owners, and ban them from participating in other subsidized schools (Art. 9)

SCHOOL SUBSIDIES (1998) Increases subsidies for schools that comply with the complete

day of school (jornada completa). For rural and isolated schools the per-student subsidy is

multiplied by a factor that is higher for smaller schools (Art. 9 and 12).

Creates co-financed schools (“de financiamiento compartido”) For private schools (municipal and corporation only

secondaries) These can charge monthly per-student fees of up to 4

subsidy units (USEs), though some students may be exempted by SES criteria. Subsidies decrease with higher such fees (Arts. 23-34).

Creates subsidy (“de refuerzo educativo”) for schools that implement remedial courses for bad performing students (Art. 39)

Creates subsidy for “excellent” schools totally for teachers (Art. 40)

Creates “special additional” subsidy for all subsidized schools (Art. 41)

Establishes clearer sanctions and oversight procedures (Arts. 43-50)

Source: Decreto con Fuerza de Ley 2 de 1998, sobre subvencion del Estado a establecimientos educacionales. Modifies DFL 2 of 1996.

LAW OF PREFERENTIAL SUBSIDY (2008) Purpose: Creates a preferential subsidy (SEP) to improve the

quality of municipal and private schools that have priority students (of low SES) in pre-primary and primary levels (Arts. 1, 2 and 7). It complements the “Ley de Subvenciones” of 1998.

Classifies schools that receive SEP in 3 categories (Art. 9 ): “autonomous” - show good student performance “emergent” - have not shown good student performance “in recovery” - reiterated bad student performance

Mandates special assistance to rural or isolated schools with few teachers (Art. 11 ).

Establishes an additional subsidy for "concentration of priority students" (SCAP), that increases with higher percentages of priority students –up to 60% (Art. 16)

Source: Ley 20.248 de 2008, que establece subvención escolar preferencial.

LAW OF PREFERENTIAL SUBSIDY (2008)Positive Negative

Material

• “Autonomous“ schools receive twice the per-priority-student SEP as "emergent" ones (Art 14).• SEP formula incentivizes schools to maximize attendance by priority students (Art. 15).• SCAP formula stimulates schools to maximize attendance by all students and the percentage of priority students (up to 60%). • "Emergent" and “in recovery” schools are eligible for additional funding to implement an “Improvement Plans” (Arts. 20 and 27)• Information about schools that receive preferential subsidies is public (Art. 32)

• “Autonomous” or “emergent” schools that are re-classified as "in recovery" are not eligible to receive SEP subsidies (Art. 24).

• Violations are deemed serious and may be sanctioned by fines, and suspension and cancellation of subsidies (Arts. 34-37 and "Ley de Subvenciones” of 1998)

Symbolic

* Schools whose students have good performance are upgraded as "autonomous" and are subject to less stringent requirements (Art. 18).

• Schools with poor student performance are classified as "emergent“ or "in recovery“ and are subject to further controls (Arts 19 and 24). • “In recovery” schools must improve their performance in 4 years or lose accreditation (Arts. 26 and 28).• Violations may be sanctioned by revoking of school accreditation and the ban of "owners" to administer schools (Arts. 34-37 and "Ley de Subvenciones” of 1998)

Source: MINEDUC

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

0.0

200,000.0

400,000.0

600,000.0

800,000.0

1,000,000.0

1,200,000.0

1,400,000.0

Enrollment in primary education by school type (1990-2009)

Municipal Private Subsidized Private

Source: MINEDUC

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

0.0

50,000.0

100,000.0

150,000.0

200,000.0

250,000.0

300,000.0

350,000.0

400,000.0

450,000.0

500,000.0

Enrollment in secondary education by school type (1990-2009)

Municipal Private SubsidizedPrivate Corporations

PUBLICITY OF INFORMATION AS MARKET INCENTIVE

Source: MINEDUC (2011), http://www.simce.cl/mapas/

High correlation between performance and SES!

TEACHER-LEVEL INCENTIVES

CLASSIFICATION OF TEACHER INCENTIVES

GOAL: Improve education equity and quality through teacher incentives that:

CLASSIFICATION OF TEACHER INCENTIVESPositive Negative

Material •Salary increases• Experience (in years)• Professional development

•Performance bonuses• Individual (AEP, ADVI)• School-level (SNED)

•Working Condition Bonus •Scholarships

•Bonuses to retire•Dismissal

Symbolic •Professionalization• Prestige of profession• Professional development

•Teacher Evaluation•Awards• SNED• AEP

•Promotions • Career Ladder• Master Teacher Network

•Teacher Evaluation • Basic, Unsatisfactory

TEACHER-LEVEL INCENTIVES: THE FIRST REFORM TEACHER’S STATUTE I (1991)

Redefined and re-established the teaching profession Established job security and tenure for teachers Increased teaching salaries and centralized control

National minimum starting salary Experience: 6.67% of base salary per year of service; 100% after

30 years Professional development: up to 40% of salary can be determined

by successful completion of programs Bonus for difficult conditions: up to 30% of base for hard-to-staff

locations Provided professional development & established it as a right

Preferential access to P.D. for teachers of low performing schools Established working condition requirements

Holidays, sick days, personal days, work-day lengthSource: Biblioteca Congreso Nacional. Ley 19.070 (1991)

TEACHER-LEVEL INCENTIVES: SCHOLARSHIPS SCHOLARSHIPS FOR QUALIFIED CANDIDATES (1996– )

Goal: Attract strong candidates to the profession

Incentive: Tuition and stipend scholarships for the most qualified teacher candidates

Details: Current program

If students score a minimum of 600 on the college entrance exam, they are eligible for the scholarship

Must give a 3-year commitment to teaching after completing degree

http://www.youtube.com/watch?v=pCiNGnt8-as&feature=player_embedded

MINEDUC (2011)

TEACHER-LEVEL INCENTIVES: INDIVIDUAL BONUS BONUS FOR DIFFICULT WORKING CONDITIONS (1991—)

Goal: Attract and retain quality teachers in rural and high-poverty schools

Incentive: 4 -30% of the National Minimum Pay provided as a bonus to work under challenging conditions in municipal or subsidized schools

Details: Characteristics to determine bonus: Isolation of the school Characteristics of students the school serves Risk level of population and neighborhood (average number of students in

a class, crime rate in neighborhood, and poverty level of neighborhood). From 2006-2008, 84.4% of the schools were urban, 1,351,519 students

attended schools included in the program (39% of total), 76.1% of the schools selected were municipal schools Source: MINEDUC (2011)

TEACHER-LEVEL INCENTIVES: GROUP BONUS SYSTEM OF MERIT AWARDS TO SCHOOLS (SNED) (1996—)

Goals: Improve quality of teaching, recognize excellence, encourage collaboration within schools, provide information to parents

Incentive: Two-year bonus for teachers for excellent performance on school level to top 25% of each of 125 “homogeneous” subgroups of municipal and subsidized private schools within the 15 regions

Details: Based on overall SIMCE scores (37%), improvement in scores (28%), initiative of school (6%), improved working conditions (2%), equality of opportunity (22%), parental feedback (5%)

In 2010-2011, 2,656 schools were recognized and 58,597 teachers benefited; average bonus approximately $1,500 per year. Source: MINEDUC (2011)

TEACHER-LEVEL INCENTIVES: TEACHER EVALUATION TECHER PERFORMANCE EVALUATION SYSTEM (2004– )

Goal: Improve the quality of municipal teacher performance

Incentive: 4 Result categories with incentives at each level Outstanding, Competent, Basic, Unsatisfactory

Details: Every municipal teacher is evaluated every 4 years; Based on self-assessment (10%), Portfolio (60%), Interview (20% ), Recommendation (10%)

MINEDUC (2011)

TEACHER-LEVEL INCENTIVES: TEACHER EVALUATION

Source: MINEDUC (2011)

TEACHER-LEVEL INCENTIVES: INDIVIDUAL BONUS AWARD FOR INDIVIDUAL PERFORMANCE (AVDI) (2004—)

Goal: Retain best teachers with one-time bonus & recognition

Incentive: Top applicants receive award, bonus payment of up to $2300 (sliding scale as % of base national salary)

Details: Municipal teachers who score “Outstanding” or “Competent” in evaluations can take written exam on pedagogy and content within 3 years of their evaluation; those who receive “Outstanding”, “Competent”, or “Sufficient Scores” receive bonus

In 2010, 7,769 teachers took the exam; 4% Outstanding, 32% Competent, 50% Sufficient, 13% Unsatisfactory

Source: MINEDUC (2011)

TEACHER-LEVEL INCENTIVES: INDIVIDUAL BONUS AWARD FOR EXCELLENCE IN TEACHING (AEP) (2002—)

Goal: Retain teachers with salary bonus, recognition of excellence, career ladder

Incentive: Top applicants receive award, 7-8% bonus for 10 years (if they stay in the system), opportunity to become a Master Teacher Network

Details: Year-long process; municipal and subsidized private school teachers eligible; teachers take an exam and submit a portfolio; review by an independent committee

In 2010, 258 teachers received the recognition 17% of the total applicants

61% from private subsidized schools; 37% from municipal schoolsSource: MINEDUC, 2011

TEACHER-LEVEL INCENTIVES: TEACHING CAREER TEACHER PROFESSIONAL DEVELOPMENT (1991– )

Goals: Improve teaching performance, advancement of profession, retention

Incentive: Some pay increases tied to participation in professional development; scholarships to for overseas study trips

Details: Ongoing, intensive professional development Primary: 800-875 hours of professional development over 13-18 months

Curricular: Intensive 2-week workshop, sessions throughout the year, classroom visits, etc.

MINEDUC (2011)

TEACHER-LEVEL INCENTIVES: OUTCOMES

Source: Mizala & Romaguera, 2005, from MINEDUC; note: salaries include bonuses and benefits

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 20020

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Municipal Average SalaryMuncipal Starting SalaryPrivate Subsidized Starting Salary

Teacher salaries in private subsidized and municipal schools, in 2001 Chilean pesos, 1990-2002

Salaries, in 2001 pesos

Year

TEACHER-LEVEL INCENTIVES: OUTCOMES

Source: Mizala & Romaguera (2005)

Basis of teacher salary allocations 2002-2003

IMPACT OF REFORMS

Source: MINEDUC

TEACHER-LEVEL INCENTIVES: OUTCOMES

Average scores on college entrance exam for teacher candidates, compared to national average, 1998-2003

Source: Mizala & Romaguera (2005), from OECD data, obtained from Universidad de Chile

•New education candidates declined 43% 1980-1994; rose 39% 1997-2001

1998 2000 2001 2002 2003200

300

400

500

600

700

800

Average Score of Admitted Teaacher CandidatesNational Average Score

Year

PAA

Scor

e

PISA RESULTS

Source:

PISA RESULTS

Source:

DROP-OUT RATES, 1991-2008

Source: MINEDUC, 2008

IMPACT EVALUATIONS School Incentives

Examination of effect of the voucher system on the quality of schools, as measured by student performance (Barrera-Osorio, Patrinos & Wodon, 2009; Mizala, Pilar Romaguera, and Miguel Urquiola, 2007; Bellei, 2009; McEwan & Carnoy, 2000)

Inconclusive results; bias in the studies & different effect estimates; SES explains large amount of variation in test scores

Teacher Incentives Examination of effect of teacher incentives on student performance

(Contreras, Flores, Lobato, 2003; Carnoy, Brodziak, Molina, Socias, 2007); entry into profession & quality of applicants (Mizala & Romaguera, 2005)

Positive impact on teacher morale, entry into profession; Inconclusive results on effects of bonuses on performance

Consensus that most incentives are not impacting education for poorest & most vulnerable

REFERENCES Barrera-Osorio, F., Patrinos, H.A., & Wodon, Q., Eds. (2009). Emerging Evidence on Vouchers and Faith-Based Providers in Education: Case

Studies from Africa, Latin America, and Asia. Retrieved from http://siteresources.worldbank.org/EXTDEVDIALOGUE/Resources/EmrgingEvidenceVouchers.pdf

Bellei, C. (2009). “The Private-Public School Controversy: The Case of Chile”. In Paul Peterson, P. & Chakrabarti, R. (Eds.). School Choice International, MIT Press. 

Carnoy, M., Brodziak, I., Molina, A., Socias, M. (2007). The limitations of teacher pay incentive programs based on inter-cohort comparisons: The case of Chile’s SNED. Education Finance and Policy Summer 2007, 2(3). pp. 189–227.

Contreras, D., Flores, L., Lobato, F. (2003). Monetary incentives for teachers and school perfromance: The evidences for Chile. Universidad de Chile, Department of Economics.

Cox, C. (1997). Education reform in chile: Context, content and implementation. Washington DC: PREAL. Retrieved from http://www.thedialogue.org/PublicationFiles/PREAL%208-English.pdf

Delannoy, F. (2000). Education reforms in Chile 1980-1998. Country-studies. Education reform and management publication series. Washington DC: The World Bank.

McEwan, P. J., & Carnoy, M. (2000). The effectiveness and efficiency of private schools in Chile's voucher system. Educational Evaluation & Policy Analysis, 22(3), 213-239.

McEwan, P., Urquiola, M., Vegas, E. (2009). School Choice, Stratification, and Information on School Performance: Lessons from Chile. Economia.

McMeekin, R. (2000). Implementing school-based merit awards: Chile's experience. Technical notes. Country studies: Education reform and management publication series. 3(1). Washington, DC: World Bank.

Minsterio de Educacion. Ley de Subvencion Escolar Preferencial § Ley Num. 20.348 (2008). Retrieved from: http://www.bcn.cl/  Ministerio de Educacion (2010). Indicadores de la Educacion en Chile: 2007 - 2008. Retrieved from

http://w3app.mineduc.cl/mineduc/ded/documentos/Indicadores_2007-2008.pdf Ministerio de Educacion (2011). www.mineduc.cl  Mizala, A. & Urquiola, M. (2007). School Markets: The Impact of Information Approximating Schools' Effectiveness. NBER Working Paper No.

13676. Mizala, A. and Romaguera, P. (2005). Teachers' salary structure and incentives in Chile. In Vegas, E. (Ed.) Incentives to improve teaching:

Lessons from Latin America. Washington, DC: World Bank., pp. 103-150.  OECD (2010). Iberoamerica in PISA 2006: Regional Report. Retrieved from http://www.oecd.org/dataoecd/37/42/45753892.pdf OECD (2010). PISA 2009 at a Glance, OECD Publishing. Retrieved from http://dx.doi.org/10.1787/9789264095298-en OECD (2010). PISA 2009 Results: Learning Trends: Changes in student performance since 2000 (Volume V). Retrieved from

http://dx.doi.org/10.1787/9789264091580-en Patrinos, H. A., Barrera Osorio, F., & Guáqueta, J. (2009). The role and impact of public-private partnerships in education. Washington, DC:

World Bank. Retrieved from http://siteresources.worldbank.org/EDUCATION/Resources/278200-1099079877269/547664-1099079934475/547667-1135281523948/2065243-1239111225278/Role_Impact_PPP_Education.pdf