Higher technical education: An alternative to university?

Background: The fast growth of higher education coverage in Chile since 1981 has occurred in a context of increasing heterogeneity in the quality of institutions. In this process, the financing policy has privileged universities, particulary those created before the 1981 reform. Despite this, since 2010 first year enrollment was higher in professional technical institutions than in universities. This, contrary to the widely held idea that students' preferences are biased towards universities, might suggest that only some universities are preferred, possibly the most traditional ones, and for the rest, students consider higher technical education a good substitute. Methodology: We use discrete Logit Hierarchical choice models and revealed preferences of students enrolled in the first year in universities and in the largest professional technical institution in Chile, to test whether student preferences by universities dominate technical institutions or whether such preferences are only limited to the most recognized universities. Results: We found that preference towards universities applies only to a selective group. In turn, there is a wide segment of substitution between nine relatively less selective universities - representing 27% of the universities considered and 22.1% of the total university enrollment in our sample-and the professional technical institute we consider in the study. We also found elements of public policy that induce students to choose the oldest and the State-owned universities, beyond an objective criteria centered on quality. Conclusions: The existence of substitution between a number of universities and a professional technical institution suggest that policies favoring one type of institution over other. We identified that some public policies that are specially relevant favor students' university choice contradict the official discourse which states that quality and technical education should be privileged.