Does Money in Schools Matter? Evaluating the Effects ... - EPGE/FGV

differences in wages between the public and private schools were higher to start with.
Moreover, it seems that the increases in the southeast are robust to the inclusion of other
teacher and school characteristics, as shown by columns (3) and (4), while in the state
system in the Northeast, the inclusion of school characteristics and directors’ wages wipes
out the FUNDEF effect. In the municipal level however, the FUNDEF effect is robust to
the inclusion on other characteristics.
Tables 11 to 14 repeat the exercises of table 6 for both systems in the Northeast and
Southeast regions and the results look quite interesting. While the differences between the
private and public schools in terms of proficiency were broadly similar in all systems and
regions (about 30 points), one can only observe a rise in the proficiency of public schools in
the municipal system in the Northeast. In the other system/regions, the FUNDEF dummy
attracted a coefficient that is not significantly different from zero. Moreover, in the
Northeast municipal level, the magnitude of the coefficient also declines when other
possible FUNDEF outcomes are included in the regression, like teachers’ wages (column
5), and the directors’ wage and other school characteristics (column 6).
5) Conclusions
In this paper we investigate the effects of a 1998 reform in the funding scheme of
fundamental education in Brazil (FUNDEF) on the public teachers’ wages and on the
proficiency of public school pupils. The evidence suggests that, on average, FUNDEF
raised the teachers’ relative wages and improved the relative proficiency of the public
school students. Some indirect evidence was presented that showed that the effect of
FUNDEF on proficiency seems to be related to its effect on wages and on school