South-Western College Publishing - Economics  

Policy Debate: Do School Vouchers Improve the Quality of Education?

Issues and Background

Vouchers don't work. Smaller class size and proven academic programs do, and they are doable-tomorrow. Given a choice between serving ideology and maybe helping a relative handful of children-at the expense of the rest-or responding to the legitimate demands of the vast majority of Americans and serving the needs of all children, the choice is clear. Let's do what's right and what works.
~American Federation of Teachers
Competition and the profit motive must be reintroduced into education so that teachers and school administrators will once again have a powerful incentive to meet the needs of the children and parents they serve. It can also be expected that the elimination of existing educational monopolies will alleviate many of the ongoing battles over curriculum and religion in the schools, by allowing families to pursue an education in accordance with their own values, without the need to impose those values on others. What remains to be resolved is the question of how to integrate the reintroduction of market forces with the subsidization of families with limited financial means.
~Andrew Coulson

Educational vouchers were proposed by Milton Friedman in the 1950s as a method of improving the quality of elementary and secondary education. In recent years, there has been renewed interest in the use of vouchers. A common theme of all voucher proposals is that households who choose to send their children to private schools would receive a voucher from the government that would cover some or all of the private school tuition costs. Advocates of voucher programs argue that these programs provide households with greater freedom of choice and encourage competition, providing an incentive system that encourages all schools to improve the quality of education offered to students.

Proponents of vouchers cite studies suggesting that low-income students enrolled in private schools achieve higher levels of performance on standardized tests (as compared to children with similar observed characteristics who are enrolled in public schools). They also argue that private schools face market pressures that force them to use resources more efficiently than public schools.

Opponents of voucher systems argue that the higher level of academic performance in private schools is the result of sample-selection bias. They note that private school students tend to come from wealthier households in which parents have higher levels of educational attainment. Those who volunteered to participate in voucher programs, it is argued, are also not random students from the population. Instead, these individuals tend to come from homes in which parents place a greater interest in educational achievement. This makes comparisons between public and private school outcomes problematic. The sample-selection bias argument suggests that lower academic performance of public school students is the result of differences in ability and family background factors rather than the result of a lower quality of education. A related argument suggests that the alleged "inefficiency" of public schools is the result of the broader range of services required to serve their more diverse mix of students. Advocates of the public school system argue that voucher systems transfer resources away from the schools that provide education and training to the most needy members of society.

Several experimental voucher programs have been introduced in the past decade. One of the oldest and largest is a pilot program begun in 1990 in Milwaukee, Wisconsin. Initial analyses of this data have suggested little or no improvement in the quality of education as the result of a voucher system. These results, however, are quite controversial and are the subject of a good deal of debate. More recent pilot programs in New York City and Cleveland are also beginning to provide additional evidence for this debate. Preliminary, and equally controversial, results from the New York Choice Scholarship Program suggest that a voucher system has resulted in modest improvements in test scores for low-income students that transfer to private schools as a result of a scholarship program.

Another component of the school voucher debate is the separation of church and state that is required under the U.S. Constitution. A large proportion of private schools in the U.S. have a religious affiliation and provide some amount of religious instruction. Opponents of a voucher system argue that aid to religious schools is unconstitutional.

There seems to be a growing concern with the quality of elementary and secondary education in the U.S. International comparisons suggest that U.S. students often lag substantially behind students in foreign schools on many measures of academic achievement, particularly in math and sciences. The debate over vouchers is likely to continue as we look for ways to improve the quality of education.


Primary Resources and Data
  • National Center for Educational Statistics, "Digest of Educational Statistics, 2005"
    The Digest of Educational Statistics contains an extensive collection of statistics concerning the costs of education, educational enrollments, educational outcomes, and a variety of other educational statistics.

  • U.S. Department of Education
    The U.S. Department of Education's web site contains information on federal education programs, links to online educational resources, access to an online bibliographic database, and information on Department of Education publications.

  • On-line Data Archive - The Milwaukee Parental Choice Program, 1990/1991 - 1994/1995
    The Data and Program Library Service at the University of Wisconsin contains an on-line data archive for the Milwaukee Parental Choice Program. Under this experimental voucher program, the state of Wisconsin paid private schools an amount equal to the amount that Milwaukee public schools would have received in state aid. This web site contains a description of the study, a bibliography of studies related to this program (several of these papers are available online), and downloadable survey data.

  • Kyo Yamashiro and Lisa Carlos, "Private School Vouchers"
    In this online article, Kyo Yamashiro and Lisa Carlos provide a useful summary of alternative voucher system proposals. They also provide a good discussion of the arguments for and against a voucher system. A summary of research findings (as of 1995) is also included in this article.

  • Dan Laitsch, "School Choice and Privatization Efforts: A Legislative Survey"
    Dan Laitsch examines state legislation regarding school choice in this October 1998 online article. This article illustrates the extensive variety of school choice initiatives that are under consideration. These initiatives include vouchers, charter schools, and tax credits. As Laitsch notes, there are still numerous unresolved constitutional issues involving the use of public funds to pay for educational services at schools operated by religious institutions. (To view this document, the Adobe Acrobat viewer plugin is required. You may download this viewer by clicking here.)


Different Perspectives in the Debate

  • The Bradley Foundation
    The Bradley Foundation is one of the primary financial supporters of the movement to introduce educational vouchers. Their web site contains information about their scholarship programs as well as other initiatives.

  • Milton and Rose D. Friedman Foundation
    The Milton and Rose D. Friedman Foundation provides financial support for educational choice program. This web site also contains links to articles and studies that support increased privatization of education.

  • The Center for Educational Reform
    The Center for Educational Reform provides information, news, and links to online resources that support vouchers and other privatization efforts. Much of the voucher related materials can be found on their School Choice page.

  • National Education Association
    The National Education Association opposes vouchers and other privatization efforts. Their Vouchers page contains information and links to resources that suggest that a voucher system is undesirable.

  • Lawrence C. Stedman, "The Condition of Education: Why School Reformers are on the Right Track"
    Lawrence C. Stedman discusses the need for school reform in this online article. He provides summaries of studies of the quality of education and notes that there is no compelling evidence of a decline in the general quality of education. Instead, most evidence points to either stable or rising performance on standardized measures of educational outcomes. Stedman notes, however, that there are problems with the U.S. educational system. These problems include limited student experience in writing, limited interactive learning, brief or nonexistent homework assignments, and, at best, limited student and instructor engagement in academic pursuits. He suggests that these problems are, and should continue to be, the focus of reform efforts. While this is not, strictly speaking, an article dealing with vouchers, it provides some useful insight into trends in measured academic outcomes.

  • Peter Schrag, "The Great School Sell Off"
    In this article appearing in the Winter 1993 issue of The American Prospect, Peter Schrag argues against school voucher systems. He argues that there is no reliable evidence suggesting that private schools provide enhanced educational outcomes. Schrag suggests that it is wiser to devote more spending to raising standards in public schools.

  • Bob Chase, "Voucher System Would Hurt Schools Not Help"
    In this December 2, 1996 document, Bob Chase, the President of the National Education Association provides an argument against vouchers. He argues that a voucher system will raise the cost of education and provide public subsidies to private schools that reject a substantial proportion of their applicants. Chase argues that a voucher system helps "a few kids at the expense of many...."

  • School Choices
    This web site provides links to resources related to educational vouchers. These resources include press releases, online articles, information about current court cases, and a variety of related materials.

  • Milton Friedman, "The Role of Government in Education"
    Milton Friedman argues for the increased use of markets to improve the quality of education in the U.S. Friedman argues that while government subsidies for education may be appropriate, there is no necessary economic reason for government provision of educational services. Friedman argues for a voucher system that encourages competition among a variety of educational institutions.

  • Milton Friedman, "Public Schools: Make Them Private"
    Milton Friedman provides further arguments for a voucher system in this June 23, 1995 CATO Institute Briefing Paper. Friedman argues that school quality has declined as it has become increasingly centralized. He argues that political revolutions have caused economic systems to replace centrally planned resource systems with market systems. Friedman argues that a similar market-based approach would improve the quality of education and believes that a voucher program is the best way to achieve this goal. He also notes that income inequality has been increasing in the U.S. He believes that the current education system encourages this growing income disparity by providing low-quality public schools to students from low-income households while students from higher-income households receive higher quality public or private education.

  • David Friedman, "The Weak Case for Public Schooling"
    David Friedman argues, in this online article, that the government should not provide education. He argues that most of the benefits from education are captured by the individual who acquires it. While some of the benefits from education are captured by society in the form of higher tax payments from individuals with higher levels of educational attainment, Friedman argues that this is an argument against the efficiency cost of taxation, not an argument for public subsidies for education (since educational subsides require higher taxes). He believes that externality arguments for public subsidies are, at best, quite weak. Friedman provides several examples of cases in which public education relied on educational philosophies that were not consistent with the educational needs of children and suggests that this is the result of relying on public control rather than private choice. While Friedman accepts that capital market imperfections may limit access to very low-income families, he suggests that this should be dealt with by subsidies for low-income households, not with across-the-board provision of public education. Friedman believes that a complete privatization of education is better than a voucher system because a voucher system still provides the government with central control over education and the possibility of wasteful expenditures. He does believe, however, that a voucher system would be preferable to our current public educational system.

  • Andrew Coulson, "Markets Versus Monopolies in Education: The Historical Evidence"
    Andrew Coulson presents a case for educational vouchers in this online article appearing on the Education Policy Analysis Archives web site. He argues that monopoly control over schools results in an inefficient educational system. Coulson suggests that a competitive environment would encourage all schools to improve quality and efficiency. He notes that governmental involvement in formal education is a recent phenomenon and cites historical examples of privately provided education from the period of the ancient Greeks to more recent times. Coulson provides several anecdotes suggesting that the increased involvement of the government in education has resulted in a less creative and efficient educational system.

  • Myron Lieberman, "Privatization and Educational Choice"
    Myron Lieberman provides a case for privatization in this online book written in 1989. He discusses the case for contracting out as well as the use of voucher systems.

  • Nina Shokraii Rees and Jennifer Garrett, "How Members of Congress Practice Private School Choice"
    Nina Shokraii Rees and Jennifer Garrett examine the school choices for the children of members of Congress in the September 9, 1997 Heritage publication. She finds that the children of members of Congress are significantly more likely to attend private schools than is true for a child in the general population. She suggests that Congress should support voucher systems that would provide similar opportunities for families with lower levels of income.

  • Jennifer Garrett, "Another Look at How Members of Congress Exercise School Choice"
    Jennifer Garrett re-examines the school choices for the children of members of Congress in the May 22, 2002 Heritage publication. She finds that the children of members of Congress are still significantly more likely to attend private schools than is true for a child in the general population.

  • Nina Shokraii Rees, "Public School Benefits of Private School Vouchers"
    Nina Shokraii Rees argues, in this article appearing in the January/February 1999 issue of Policy Review, that voucher systems and other school choice programs are forcing public schools to improve. She provides a variety of anecdotal evidence and summaries of more formal studies that support this argument. A collection of links to other web sites that support voucher and other school choice programs appears at the end of this document.

  • Samuel Casey Carter, "A Question of Capacity"
    In this January/February 1999 article in Policy Review, Samuel Casey Carter notes that vouchers can provide improvements in the quality of education for a small proportion of public school students. He argues, though, that private school capacity will increase only if there is a substantial increase in the size of the voucher payment. Carter argues in support of an expansion in voucher programs as a method of improving educational quality.

  • Martin Carnoy, "Do School Vouchers Improve Student Performance?"
    In this online January 1-15, 2001 American Prospect article, Martin Carnoy examines the empirical evidence concerning school vouchers and educational performance. He notes that several of the studies find no significant effects when the effect of other factors are held constant while some found significant gains for minority students who transfer from public to private schools. Carnoy notes that these studies are flawed by the nonrandom nature of the selection process.

  • John F. Witte, Christopher A. Thorn, and Kim A. Pritchard, "Private and Public Education in Wisconsin: Implications for the Choice Debate"
    John F. Witte, Christopher A. Thorn, and Kim A. Pritchard use data from the pilot Milwaukee Parental Choice Program to compare and contrast the characteristics of students at public and private schools. They note that approximately 90% of the students in private schools are enrolled in schools with a religious affiliation. Witte, Thorn, and Pritchard note that private school students are disproportionately white and are more likely to live in urban areas. Parents of private school students have higher incomes, lower unemployment rates, and are more likely to be employed full time.

  • John F. Witte, Troy D. Sterr, and Christopher A. Thorn, "Fifth-Year Report: Milwaukee Parental Choice Program"
    This report summarizes the official findings for the first five years of experience with the Milwaukee Parental Choice Program. Witte, Sterr, and Thorn note that the program was successful in providing an opportunity for children from low-income households to attend private schools. They note, however, that no convincing evidence was found that private school attendance resulted in improved educational outcomes. Parents of children in the program, however, evaluated the private schools more favorably than the public schools previously attended.

  • Erik Gunn, "Voucher Schools: The Inside Story"
    Erik Gunn notes that many voucher schools participating in the Milwaukee study have either closed or were at risk of closing. Anecdotal evidence of the effects of these closings on students is provided in the article.

  • Jay P. Greene, Paul E. Peterson, and Jiangtao Du, "Effectiveness of School Choice: The Milwaukee Experiment"
    Jay P. Greene, Paul Peterson, and Jiangtao Du critique John Witte's studies of the Milwaukee Parental Choice Program. They note that his studies rely on highly selected samples that are subject to substantial missing data problems. Greene, Peterson, and Du use an alternative methodology that relies on the random treatment of students to treatment and control groups. They find that voucher students exhibited substantial gains in reading and math scores during their third and fourth years of attendance at private school. (To view this document, the Adobe Acrobat viewer plugin is required. You may download this viewer by clicking here.)

  • John F. Witte, "Reply to Greene, Peterson and Du: 'The Effectiveness of School Choice in Milwaukee: A Secondary Analysis of Data from the Program's Evaluation'"
    John Witte critiques the Greene, Peterson, and Du study in this online response. Witte argues that the methodology used by Greene, Peterson, and Du cannot be appropriately applied to small samples of the sort that appear in this data set. He also notes that their study did not undergo to peer review process that is the standard in all science and social science disciplines. Witte notes that Green, Peterson, and Du do not rely on the conventional standards of statistical significance used by virtually all statistical practitioners, do not fully utilize all of the data available in the sample, do not control for variables that are known to be important, and do not adequately report their methodology and results.

  • Jay P. Greene and Paul E. Peterson, "Methodological Issues in Evaluation Research: The Milwaukee School Choice Plan"
    In this online paper, Jay P. Greene and Paul E. Peterson respond to Witte's reply. Greene and Peterson argue that Witte did not defends his own analysis against their criticisms. Greene and Peterson also provide a detailed justification for the empirical methodology used in by Greene, Peterson, and Du. To view this document, the Adobe Acrobat viewer plugin is required. You may download this viewer by clicking here.)

  • Wisconsin Education Association Council, "Resources on Private School Vouchers"
    This page, provided by the Wisconsin Education Association Council, contains an extensive collection of links to online articles concerning school vouchers. Since this organization represents public school teachers, most of the linked articles provide arguments or evidence against the use of vouchers.

  • Wisconsin Education Association Council, "Private Schools and Private School Vouchers: What the Research Shows"
    The Wisconsin Education Association Council provides arguments against school vouchers in this online research paper. The Association argues that recent research suggests that the higher level of student achievement found in private schools is the result of differences in student background, ability and other factors.

  • National Education Association and American Federation of Teachers, "School Vouchers: The Emerging Track Record"
    In this April 1999 document, the National Educational Association and the American Federation of Teachers provide an analysis of research findings on school vouchers. They argue that the existing body of research provides no compelling evidence of educational benefits that result from voucher systems. It is argued that the few studies that found evidence of higher quality of education in private schools were either based on small samples or did not control for differences in class size. Studies are cited that indicate that vouchers lead to greater socioeconomic and racial segregation in schools and drain resources away from public education.

  • American Federation of Teachers, "Vouchers Vs. Small Class Size: Comparing Effects, Costs, and Public Support"
    In this online article, the American Federation of Teachers summarizes several studies that suggest that class size has a larger effect on educational outcomes than vouchers. The Federation argues that reductions in class size will generate larger improvements in educational outcomes than would result from the same expenditures on voucher programs. (To view this document, the Adobe Acrobat viewer plugin is required. You may download this viewer by clicking here.)

  • Paul E. Peterson, William G. Howell, and Jay P. Greene, "An Evaluation of the Cleveland Voucher Program After Two Years"
    In this June 1999 study, Peterson, Howell, and Greene investigate the effects of the first two years of the Cleveland Voucher program. This program, begun in 1996, provided scholarships to 1996 children enrolled in kindergarten through third grade. The scholarships could be used at any participating religious or secular private school. Peterson, Howell, and Greene find evidence of substantially higher reading and math tests scores for the scholarship students. They also note that parents of scholarship students are more satisfied with the quality of education. (To view this document, the Adobe Acrobat viewer plugin is required. You may download this viewer by clicking here.)

  • Paul E. Peterson, David Myers, and William G. Howell, "An Evaluation of the New York City School Choice Scholarships Program: The First Year"
  • David Myers, Paul Peterson, Daniel Mayer, Julia Chou, and William G. Howell, "School Choice in New York City After Two Years: An Evaluation of the School Choice Scholarships Program: Interim Report"
  • Daniel P. Mayer, Paul E. Peterson, David E. Myers, Christina Clark Tuttle and William G. Howell, "School Choice in New York City After Three Years: An Evaluation of the School Choice Scholarships Program: Final Report"
    The evaluation of the first three years of the New York City School Choice Scholarships Program was conducted by Mathematica Policy Research and the Program on Education and Governance at Harvard University. Under this scholarship program, the School Choice Foundation offered 1,300 scholarship of $1,400 per year (for at least 3 years) for children from low-income households who transferred from a public school to a private school. A random selection procedure was used to select 1,300 of the more than 20,000 applicants for these scholarships. The authors of these studies find that African-American students who received scholarships received higher test scores than students who had not received scholarships. No statistically significant effect on test scores was found for Latino students after three years of this study. The parents of scholarship students reported a higher level of satisfaction with the quality of education than did parents of students in the control group. (To view these documents, the Adobe Acrobat viewer plugin is required. You may download this viewer by clicking here.)

  • Jay Greene, "A Survey of Results from Voucher Experiments: Where We Are and What We Know"
    Jay Greene summarizes the empirical evidence concerning vouchers in this July 2000 online article. He notes that well-designed studies have found either a positive or neutral affect of vouchers on student achievement, voucher funding outcomes have been positively assessed by parents, and the use of vouchers has had a positive or neutral effect on desegregation.

  • Henry M. Levin and Cyrus E. Driver, "Estimating the Costs of an Educational Voucher System"
    Henry M. Levin and Cyrus E. Driver provide rough estimates of the cost of an educational voucher system. This study provides a nice description of the societal costs associated with the introduction of such a system. While noting that specifics of the voucher plan would affect the overall costs, they argue that such a plan is likely to lead to higher societal costs of providing elementary and secondary education.

  • National Center for Educational Statistics, "Comparing Private Schools and Public Schools Using Hierarchical Linear Modeling"
    This July 2006 NCES study finds that, while private elementary school students outperform public elementary school students on standardized tests, this effect is reversed when student characteristics are held constant. Controlling for individual student characteristics, public school students outperformed private school students on a standardized mathematics exam. There was no significant difference between private and public school students in performance on a standardized reading exam when student characteristics are held constant. (To view this document, the Adobe Acrobat viewer plugin is required. You may download this viewer by clicking here.)

  • Paul E. Peterson and Elena Llaudet, "On the Public-Private School Achievement Debate"
    This August 2006 working paper critiques the July 2006 NCES study (listed above) that compared educational outcomes between private and public elementary schools. The NCES study found that, after student characteristics were held constant, that public school students performed as well as or better than private school students. Peterson and Llaudet argue that several of the variables included in the NCES study are controllable by the school and are not appropriate independent variables. When they replace these variables with alternative measures, it is found that private school students have better outcomes on the standardized tests used as the dependent variable in both studies. (To view this document, the Adobe Acrobat viewer plugin is required. You may download this viewer by clicking here.)

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