What Is Wrong with Education Vouchers?
Prasch, Robert E., Sheth, Falguni A., Journal of Economic Issues
The underlying business-like presumption . . . appears to be that learning is a merchantable commodity, to be produced on a piece-rate plan, rated, bought and sold by standard units, measured, counted and reduced to staple equivalence by impersonal, mechanical tests.
Thorsten Veblen 1918, 221-22
Recently we have seen an escalation in the rhetoric, money, and energy being devoted to proposals for "education vouchers." While the specifics of the several plans differ, the prototype would allow parents to enroll their children in any school of their choice--public or private, religious or secular [Friedman 1962, chap. 6; 1980, chap. 6; Lieberman 1989, chap. 7; Miller 1999; "Questions on School Choice," 1999]. While we would agree that the schools could stand some improvement, we are also convinced that these proposals embody several important flaws.
We should begin by observing that, despite the insistent and oft-repeated claims of school choice proponents, our schools are not obviously worse now than they were during some mythological past epoch. For example, the alleged decline in average SAT scores can be attributed to the fact that a much larger percentage of high-school graduates now take the exam [Molnar 1996, 80-82]. Given this reality, and the decreased revenues that are available to many school systems, the fact that SAT scores have not declined more than they have should be taken as a monument to the superior performance of the nation's public schools.
History can also be of assistance in this discussion. A largely free market typified American education up until the end of the nineteenth century. The result was a school system that was firmly under local control but was often of very poor quality. Schools were poorly attended and poorly staffed; teachers were subject to arbitrary rules and spontaneous dismissal. Moreover, the educational needs of African-Americans were also poorly served, since the structure of the market in education and the resultant local control colluded with the racism and self-interest of their white neighbors to exclude them from the opportunity to pursue a decent education [Link 1986, chaps. 1-3; Litwack 1998, chap. 2].
Proponents of education vouchers subscribe to the view that unfettered competition is a refreshing tonic that is beneficial to all. We would agree that markets are a tool--even an important tool--of social policy, but it does not follow that markets are always appropriate. Markets also do not necessarily generate self-reliance and innovation, along with superior and more efficient modes of distribution. While it is the case that markets, under certain conditions, can generate favorable results, we are also convinced that they are much more complex than their conventional depiction in the economics literature--asymmetric information, signaling, and unequal distributions of income all have a role to play in any serious study of a proposed "market" for educational services. With regard to education, the introduction of vouchers will, in all likelihood, generate competition. What is less clear is whether this competition will provide a satisfactory education.
Let us begin with the fairly simple observation that education, considered as a commodity (a dubious starting point in itself), is both multifaceted and complex. This fact alone imposes great demands on "consumers," especially in the case that the purchaser of the commodity, the parent, is unable to make a direct inspection or assessment of the true quality of the services received. Education, after all, is necessarily bestowed on the consumer's child--a person who is generally considered to be incapable of an informed assessment of the quality of the educational experience she is receiving. 
Under a market system, parents will necessarily be forced to evaluate schools by gathering information through informal networks and by comparing quantitative indicators such as average student performance on various standardized tests. …