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

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 a more 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.