Friday, July 15, 2011

Investment in education:The human capital battle in Chile

Chilean students of different levels, although mostly from public universities, have been claiming about the current conditions of public education, and the implications of private investment in this field.
Public universities(25),are financed by the State with percentages which has been decreasing in real terms over the years. In the last five years, Public Universities, have submitted its Corporative project to the evaluation of the National Committee of accreditation to get the quality certification ,which is a necessary condition to apply for public funds to develop academic and research programs. At the same time, due to the quality signal, it allows to get the preferences of students. In Chile, there is no free education at the university(college) level. Parents must finance their education when they get into the university. However, there is a virtuous circle of quality which should be considered.
On the other side of the story, since the eighties, Private sector has been allowed to invest in education at all levels. Since then, Private Universities have grown steadily. Actually there are(roughly) 40,which have more than 50% of total students registered in Chilean Universities. Private Universities has allowed an historic increase of students registered in universities, which it is fact to be considered.-
The students (and professors as well) claims have two lines of discussion:
a.- The State and its responsibility with Education requires some definitions.
b.- The negative reaction to the profit –seeking behavior of Private Universities, given that they have been authorized as such based only on academic purposes.
Given that the State responsibility begins where the private sector responsibility end, Private Universities play a key role . Therefore, in this case the State should do what the private Universities can not do, such as pure research and innovation research which are too costly . It follows that the expected course of action, should follow a mixed path :to reinforce private universities, but taking care of its profit level such that to pay taxes for it, and on the public side to focus resources on those subject which public universities based on quality standards criteria, do better than their private counterparts.
Concerning the seeking profit behavior of Private Universities, it is important to keep in mind that there is also seeking profit behavior in private health by physicians ,and related insurance companies, lawyers and some politicians. Thus, the problem with private universities, should be to make them accountable, but not rule it out for this investment.