Impact on Education: Preliminary results showed no significant differences in school enrollment between lottery winners and losers three years after application. But lottery winners were 15 percentage points more likely to have attended private school, had completed an average 0.1 more years of schooling, and were about 10 percentage points more likely to have finished 8th grade, primarily because they were less likely to repeat grades. The results also show that lottery winners worked about 1.2 fewer hours per week than lottery losers.
Impact on Economic Returns: Analysis of the economic returns to the additional schooling attained by winners after three years of participating in the program suggests that the benefits from increased income greatly exceeded the tuition costs to families and the government. Annual earnings of parents in our sample were about $2,400 per worker, who had on average only 5.9 years of education. Since the average PACES applicant had already completed 7.5 years and was still in school at the time of the survey, it can be assumed that their expected earnings are $3000, even without the benefit of private schooling. If higher test scores have a grade-equivalent payoff, lottery winners’ wages can be expected to rise by $36 to $300 per year, for estimated earnings of up to $3,300. Discounted over applicants working lives, these benefits easily outweigh the combined educational resource cost to the government and household per lottery winner, which are estimated at no more than $195.
Long-Term Effects: Later, in 2005, researchers examined administrative records on registration and test scores from a government college entrance examination. Lottery winners were more likely to take the university entrance exam, a good predictor of high school graduation, since 90 percent of all high school graduates take the exam. Within the sample of voucher applicants, about 28 percent of students took the ICFES exam, and vouchers raised the exam registration rates about 7 percentage points. While test scores suggest vouchers had more positive effects than simply reducing grade repetition, no strong conclusions were able to be drawn about the long-term effects of private schooling on test scores.