CEPA Working Paper No. 20-11 - Is School Funding Unequal in Latin America? - A Cross-country Analysis

Oct 15, 2026

Uploaded by Angel

Public education spending in Latin America has risen markedly over recent decades, raising the key question of whether higher budgets translate into more equitable resource distribution. This analysis measures inequality in per-pupil spending across regions with different socioeconomic status within Brazil, Chile, Colombia, Ecuador, and Peru. Results indicate varying trends: Brazil’s gap narrows yet remains widest; Colombia becomes more regressive; Peru shifts from regressive to progressive; Chile and Ecuador stay consistently progressive.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages46

Reading Time1 h 56 min

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Introduction

Research Questions and Approach

Main Findings

CEPA Working Paper No. 20-11 Is School Funding Unequal in Latin America? A Cross-country Analysis AUTHORS Eleonora Bertoni Inter-American Development Bank Gregory Elacqua Inter-American Development Bank Luana Marotta Inter-American Development Bank Matías Martinez Northwestern University Humberto Santos Inter-American Development Bank Sammara Soares Inter-American Development Bank ABSTRACT Public spending on education has increased signiﬁcantly in Latin America over the last several decades. Yet, the question remains as to whether greater spending translates into amore equitable distribution of resources. We address this issue by measuring inequality in per-pupil spending between regions of varying socioeconomic status (SES) within ﬁve diﬀerent countries: Brazil, Chile, Colombia, Ecuador, and Peru. The results show that while Brazil’s funding gap has narrowed over time, this federal nation has the widest socioeconomic spending divide, due to large inequalities in local revenues between high and low SES regions. School funding in Colombia has become more regressive over time, though its gap is half the size of Brazil’s. Meanwhile, the distribution of school funding in Peru has changed, shifting from regressive (beneﬁting the richest regions) to progressive (beneﬁting the poorest regions) . Education spending in Chile and in Ecuador have instead been consistently progressive. However, while the progressiveness of funding in Ecuador is driven by transfers targeting disadvantaged rural areas, the funding formulas in Chile address socioeconomic inequalities beyond the rural-urban gap. VERSION December 2020 Suggested citation: Bertoni, E. , Elacqua, G. , Marotta, L. , Martinez, M. , Santos, H. , & Soares, S. (2020) . Is School Funding Unequal in Latin America? A Cross-country Analysis. (CEPA Working Paper No.20-11) . Retrieved from Stanford Center for Education Policy Analysis: [http://cepa.stanford.edu/wp20-11](http://cepa.stanford.edu/wp20-11) Introduction Since the Coleman Report (1966), there has been a long-running debate over whether money matters in education. To better understand this issue, recent studies have exploited exogenous shocks in school funding to estimate the causal impact of additional resources on educational outcomes. Their results converge around the conclusion that changes in per-pupil spending do, infact, affect student outcomes both in the short and long terms, and that the positive effects of increased spending are larger for disadvantaged students (Card and Payne, 2002; Jackson et al., 2015; Lafortune et al., 2018; Candelaria and Shores, 2019) . Yet, lower-income students are more likely to attend schools that are underfunded and under-resourced. This question is particularly pertinent in Latin America and the Caribbean (LAC) region, where public spending on education has increased significantly over the last several decades. Indeed, government expenditure on education as a percentage of GDP rose from 3% in the 1990sto over 5% in 2017, converging to the OECD average. In current dollars, spending on primary and secondary schools now surpasses US$2,000 per student, which, while still low compared to most OECD countries, in real terms represents roughly triple that which was spent per student in the 1990s. Little is known, however, about the extent to which this greater spending has equally benefited students of diverse socioeconomic backgrounds within LAC countries. During this same period, different reforms have aimed to make the distribution of school funding more equitable. For instance, in 2008, the Preferential Subsidy Law (SEP law) in Chile increased the voucher for students at the bottom 40% of the socioeconomic distribution by 50% and provided a differential subsidy for schools with greater concentrations of disadvantaged pupils. Meanwhile, Brazil implemented Fundeb (Fund for the Maintenance and Development of Basic Education and Teacher Appreciation) i

FAQs

What does the paper analyze regarding education spending?

It examines how unequal per-pupil school funding is across regions with different socioeconomic status within five Latin American countries.

Which countries show the widest or changing funding inequalities?

Brazil has the widest socioeconomic spending divide; Colombia becomes more regressive over time; Peru shifts from regressive to progressive funding.

How do Chile and Ecuador compare in terms of funding progressiveness?

School funding in Chile and Ecuador remains consistently progressive across the period studied, though Ecuador’s progressiveness is driven by transfers to disadvantaged rural areas while Chile’s formulas address broader socioeconomic inequalities.

Oct 15, 2026

Uploaded by Angel