Social and education polices

Unlike policies for natural resources which have remained highly centralised in Chile, some social services policies have been largely devolved to the municipal level. Basic healthcare is administered locally and partially funded by local revenues. The result has been a large variability in the quality of healthcare that is highly correlated with the level of municipal income. While the national government provides per capita grants for these services, the cost of delivering equivalent services is always higher in more rural localities than in more urban ones because of differences in density, distance and critical mass. Since rural comunas typically have lower incomes, they are less able to top up the national grant and, consequently, the quality of healthcare and education declines.

This has major consequences for economic development in these regions. Improving the level of human capital has been identified in recent OECD studies (OECD, 2009; 2012a) as the key driver for growth at the regional level, particularly improvements on the lower skilled human capital. Regions become less attractive places for businesses when the health and skills of workers are below standards. Furthermore, without firms to create jobs, poverty and unemployment increase, further depressing prospects. In response, people begin to leave, often for urban areas, where they hope to find work. However, they face the same difficulty in finding work in urban areas and can become dependent on public support.

Enhancing education in rural regions will not only promote the participation of workers in the formal economy, but it will also facilitate the diversification of the rural productivity base and add more value to existing goods and services. The future prosperity of rural regions will be thus determined by key drivers such as human capital, entrepreneurship, innovation and competitive farming. In addition, it reduces the risk of capital leaking out of rural regions, when infrastructure projects lessen the burden of remoteness and accessibility of rural regions.

Higher education facilities are mainly located in urban and densely populated areas. Migration to these facilities is indeed encouraged for any rural inhabitants that want to increase opportunities and prospects in life. Primary education facilities, technical and vocational training are more connected to local conditions and are more important for the development prospects of rural areas, particularly for the case of Chile, where rural areas have a high share of youth dependency ratios.

One of the main competences devolved to municipalities in Chile is public primary and secondary education. Municipalities face several inter-related limitations affecting their management of the devolved responsibility for education, including school financing (OECD, 2009). The government transfers a per-student subsidy directly to the municipality in which the public school is located. Vouchers are not sufficient to finance primary and secondary education. Municipalities therefore normally supplement the national voucher with local resources. Larger and wealthier municipalities have the resources to have a well-qualified staff, while smaller and poorer municipalities, with fewer pupils and vouchers, find it more difficult to finance public education and manage and meet the technical needs of the school system.

This brings challenges to a number of rural communities given the presence of fewer students and less own-resources. Mechanisms to avoid exclusion would also need to include mechanisms for reaching acceptable minimum standards throughout the country, including in rural areas. Since 2006, however, there are additional subsidies for schools in rural areas, including a percentage increase in the per-student grant and a minimum threshold for schools below 17 students for rural areas in peripheral rural areas close to borders. Despite these special provisions, rural regions face difficulties in this key area:

  • • the share of students who drop out before secondary school is significantly higher in rural areas
  • • the gap in the quality of education between rural and urban regions remains significant and has not reduced in recent years.

Given the importance of human capital for the prospects of rural communities and the country as whole, a revision of this decentralised policy could attain improvements in this area. Some possibilities include:

  • • Better integrating human capital polices targeting rural regions with other policy areas. This might entail more co-ordination with regional and national policies rather than a stand-alone policy intervention with few complementarities.
  • • Expanding distance learning using the advantages of information technologies.
  • • Enhancing regional learning centres to cover education needs in targeted areas of the country.
  • • Providing a second chance for those who lack basic education and skills through literacy training, primary and secondary education, work-based programmes and arrangements to recognise informal learning.
  • • Programmes for re-qualification that take account of the characteristics of regional labour markets and of demand for different occupations and qualifications, to bridge the gap between education and the labour market.
  • • Instruments such as adult training and vocational education should also be considered in order to improve human capital, job prospects and the competitiveness of the different regions.
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