Academic journal article Economic Perspectives

School Vouchers: Recent Findings and Unanswered Questions

Academic journal article Economic Perspectives

School Vouchers: Recent Findings and Unanswered Questions

Article excerpt

Introduction and summary

Many people would argue that U.S. elementary and secondary public schools need to improve, and they would like to see U.S. students perform better in international comparisons. Ill addition, many people would like to do more to close the achievement gaps within the U.S. between lower-income and minority students and their counterparts. These concerns are shared by parents, employers, policymakers, and society more generally. There is less agreement on the root causes of the problems and how best to tackle them. For example, while some would argue that insufficient funding is the primary factor, others would say that this is not supported by the evidence, since per pupil spending has increased faster than achievement, as reflected in scores on the National Assessment of Educational Progress (NAEP). (1)

One strategy for improving school performance that has received a lot of attention by all those interested in education policy is increased competition. The idea is that just as competition can enhance efficiency and value in the marketplace for goods more generally, it can do the same for education. Namely, if schools must compete for students, then they will take steps to ensure that the educational experiences they offer are valued by parents and students. The primary mechanism proposed by those who favor more competition in elementary and secondary education in the public sector is an education voucher--a coupon redeemable for a maximum dollar amount per child if spent to attend a private school. In this way, voucher programs remove the monopoly power of local public schools. Instead of having to attend a neighborhood public school, students can use the voucher to attend a private school.

In the 2007-08 school year, roughly 55,000 students in three states--Florida, Ohio, and Wisconsin--and the District of Columbia were using publicly funded education vouchers to attend private schools (as well as other higher-performing public schools); (2) see table 1. Several other states have considered voucher programs, and some private organizations have helped create privately funded voucher opportunities. But are voucher programs effective? Do they improve the educational outcomes of the students who use them and do they improve the quality of the public schools? In this article, we review the existing empirical evidence on the impact of school vouchers on student achievement. (3) After reviewing the research, we conclude that expectations about the ability of vouchers to drastically improve student achievement, at least as measured by test scores, should be tempered by the results of the studies to date. That said, many questions remain. For example, no studies have examined the longer-run impact of vouchers on outcomes such as graduation rates, college enrollment, and future wages. Similarly, the research designs for identifying the potential impacts on students who remain in the public schools are far from ideal. Finally, we have little understanding of whether vouchers would represent a cost-neutral alternative to our current system of public education provision at the elementary and secondary school levels.

In the next section, we discuss the theoretical reasons for why education vouchers should improve student achievement followed by a discussion of the empirical approaches used for identifying the effects of vouchers. We then review the best evidence from studies of publicly and privately financed school voucher programs on the short-run impact on student achievement, discuss the evidence on the potential impact on students who remain in the public schools, consider additional voucher outcomes, and conclude.

Why should competition improve our educational system?

The idea of injecting competition into the public school system is not new; for example, Milton Friedman (1962) argued in the early 1960s for separating the financing and provision of public schooling by issuing education vouchers. …

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