Abstract: The objective of this paper is to exploit the unique information on cognitive ability contained in the International Adult Literacy Survey (IALS) data, for an in depth examination of the importance of cognitive skills for heterogeneous individuals using: (a) a quantile regression methodology which allows for an interaction between schooling and cognitive skills and (b) Instrumental Variables estimation to evaluate the relationship between quantity and quality of schooling outcomes following the 1981 “vouchers” reform in Chile.
There is persistent debate over the role of scale of operations in schools. Some argue that school franchises offer educational services more effectively than small independent schools. Skeptics counter that large centralized operations create hard to manage bureaucracies and foster diseconomies of scale and that small schools are more effective at promoting higher quality education.
