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Public Economics
Katarzyna Gluch
Critical View of
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Definition

• School voucher
• (education voucher) is a certificate issued
  by the government which parents can apply toward
  tuition at a private school (or, by extension, to
  reimburse home schooling expenses), rather than
  at the public school to which their child is
  assigned.

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Proponents and opponents disagree about the
effects of voucher programs on

• Student achievement
• The social and racial segregation of students
• Disadvantaged students

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Relevant Characteristics of the U.S. Education
System

• An educational system with a strong bias toward
  public production
• Available but limited choice among schools
• Compulsory K-12 education
• Role of peer groups in family choices

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Effects of a Voucher System on Achievement and
Productivity

1. A shift to a more productive private sector
2. The peer effects
3. The competition effect on school productivity

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A shift to a more productive private sector

• Two major strands of research
• The first one was initiated by James Coleman and
  others in the early 1980s using national data
  sets such as High School and Beyond or the
  National Educational Longitudinal Survey
• The second strand uses the recent voucher
  experiments to investigate the productivity of
  private elementary schools compared to that of
  public schools (evaluations of the publicly
  funded Milwaukee Parental Choice program and of
  the privately funded programs in Dayton, Ohio,
  Washington, D.C. and New York City)

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Milwaukee program

• Witte, Stern,Thorn, 1995 no significant
  achievement gains for voucher students
• Greene, Peterson, Du, 1998 by the third and
  fourth years of the program, voucher students
  exhibited significant gains in both math and
  reading
• Rouse, 1998 the program generated small gains
  for students in math, but none in reading

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Dayton, Ohio, Washington, D.C. and New York City
programs

• Howell and Peterson, 2002 no evidence of a
  general achievement difference between the public
  and private schools in no year and no individual
  city was there evidence that students who shifted
  to private schools achieved at higher avarege
  levels than students who remained in the public
  system

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2. The Peer Effect

• A large-scale voucher program is likely to
  increase the racial and socioeconomic
  stratification of schools
• Voucher programs place low-income families in a
  less favourable position to exercise choice than
  higher income families

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3. The Competition Effect on School
Productivity

• Fiske and Ladd, 2000 competition may force the
  public schools to offer a diverse and unfocused
  education program as they struggle to be
  attractive to all comers

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Impacts of Voucher Program on Disadvantaged
Students

• A large-scale universal voucher program
• Epple and Romano, 1998 even some students who
  switch to private schools may end up worse off.
  It can occur when private schools are allowed to
  charge more than the voucher
• A means-tested voucher program limited to
  low-income families
• - Only 30 of all families offered vouchers
  ended up using them
• - Campbell, West, Peterson, 2001 45 of the
  decliners said that they could not afford their
  preferred school, 10 said no space was
  available, and 8 cited transportation problems

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Conclusion

• School vouchers dont generate substantial gains
  in the productivity of education system
• Given the tendency of parents to judge schools in
  part by the characteristics of the students at
  school, a universal voucher system would
  undoubtedly harm large numbers of disadvantaged
  students
• BUT
• School vouchers give families, especially those
  who are economically disadvantaged, more power to
  choose the schools for their children.