1. Public Economics Katarzyna Głuch

2. 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.

3. Proponents and opponents disagree about the effects of voucher programs on: Student achievement The social and racial segregation of students Disadvantaged students

4. 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

5. 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

6. 1.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)

7. 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

8. 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

9. 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

10. 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

11. 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

12. Conclusion School vouchers don’t 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.