Colombia (25), Brazil (28), and Mexico (30).<sup>10</sup> On the contrary, the quality of teachers, as proxied by the share with tertiary education, has a positive and significant effect on learning outcomes. In 2000 and 2006, the inadequate provision of instructional material (as perceived by school directors) had a negative effect on learning outcomes. However, the effect basically goes to zero in 2009 and 2012, suggesting that any additional investment in this area after 2006 was ineffective in improving the quality of education services, assuming that school directors’ perception captures the adequate provision of instructional material.<sup>11</sup> The learning outcomes effects of the school autonomy variables capturing the institutional setting show an overall negative trend. Two of the seven variables, authority to fire teachers and authority to determine courses, had a positive and significant effect in 2000 but zero effect in subsequent years. In 2006, two autonomy variables that were not previously significant showed a negative correlation with learning outcomes: having the legal authority to formulate the school budget and authority to set student assessment methods.

To further test this apparent negative change in the correlation between school autonomy and learning outcomes during the period 2000 to 2006, we run an alternative specification following Hanushek, Link, and Wößmannn (2013). The authors aggregate the school autonomy variables into the following four indices: (1) autonomy in deciding teachers’ salaries, (2) autonomy in budget and personnel decisions, capturing the formulation of school budget, allocation of school budget and firing of teachers, (3) autonomy on academic content, capturing course content and courses offered, and (4) autonomy in monitoring students’ performance, capturing student disciplinary measures and assessments. The results of these alternative specification are presented in Annex C. Consistent with the results from the disaggregated version of school autonomy (Table 4), the alternative specification shows a negative change, between 2000 and 2006, in the correlation between two measures of autonomy and learning outcomes: budget and personnel decisions and academic content. While in 2000 schools that had more autonomy in these measures showed significantly better learning outcomes, this was no longer true in subsequent years. These are particularly important results suggesting that there was a reduction in the effectiveness of Argentine schools to transform more legal authority into better results.<sup>12</sup>

# _5.2 Microsimulation_

We use the microsimulation techniques described in Section IV to decompose the changes in learning outcomes in Argentina measured by the PISA reading results of 2000, 2006, 2009, and 2012. The exercise identifies the relative importance of changes in the elements defining the production function to explain changes in mean learning outcomes and its distribution. To restrict the number of microsimulations presented in this section, we focus on the explanation behind two distinctive trends in reading learning outcomes as described in Section III, i.e. the decline between 2000 and 2006 and the subsequent partial recovery between 2006 and 2012. We create counterfactuals to decompose these two trends to the following three factors:

> 10 OECD (2013)

> 11 An alternative explanation of these results is that in 2000 and 2006, the perception of school directors was capturing legitimate, objective, shortages of learning material. By 2009, after a significant increase in resources spent on education inputs, the perception of directors was capturing relative shortages of materials, i.e. in comparison with what other schools were getting, which is not necessarily correlated with learning outcomes.

> 12 Notice that while overall autonomy in budget and personnel decisions did not change significantly between

> 2000 and 2006, the share of schools that decided on academic content had a substantial reduction (Table 3).

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