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Education vouchers are filling private schools

Private schools, Vouchers


Indy Star

FORT WAYNE — Private schools across Indiana are nearing capacity under the state’s 3-year-old voucher program, and the space crunch could force lawmakers to consider providing money to expand buildings.

The voucher program launched in 2011, when a survey showed there were about 22,000 open seats in private schools across the state. But the program has grown to 19,809 students this year, and there are no limits on the number of students who can apply for vouchers.

That could force lawmakers to rethink how voucher money is allocated as they head into a budget-writing year in 2015.

Currently, vouchers cover the costs of salaries and operating expenses, but they don’t help pay for renovations or construction. Public schools also get operating money from the state, but they rely on property taxes for capital needs.

Tosha Salyers, spokeswoman for the Institute for Quality Education, said it’s inevitable that lawmakers will face new questions about funding.

“There is a general consensus that there will be schools interested in expanding soon. They will have to start making that decision in the next few years,” Salyers said.

Robert Enlow, president and CEO of the Friedman Foundation for Educational Choice, agreed.

“We want an equal playing field. We have to have that conversation about facilities and voucher amount,” he said.

Enlow’s group is participating in a survey on capacity that is expected to come out this month. So far, about 200 private schools have reported having 13,000 available seats. But Indiana has more than 900 private schools, 300 of which accept vouchers.

Enlow said the survey will look at whether schools already have expanded or plan to in the near future.

Expansion is a possibility at Blackhawk Christian School in Fort Wayne, where more than 200 of the school’s 867 students receive state-paid vouchers.

Lead administrator Linda Pearson said the school is running tight on space.

“We have been fortunate for a long time that we have had good, full classes. But now kindergarten through sixth is full. So is seventh and eighth. We keep a waiting list, but people tend to just choose another school,” Pearson said.

“Could we expand in the future? Possibly,” Pearson said. “Even before vouchers, we talked about adding a class or two in elementary.”

Krista Nagy, lead administrator of Lutheran South Unity School in Fort Wayne, said her school has about 125 voucher recipients among the 200 students enrolled in kindergarten through eighth grade. She said the school can add two classrooms through a reconfiguration that would affect class sizes. But it will need to add modular classrooms or partner with another organization that has available space to reach an enrollment of 250 to 260.

Nagy said she doesn’t expect the state to cover the costs of expansion.

“I would never expect the state to get involved. It would be something we would do internal fundraising for. It’s a local issue,” she said.

House Ways and Means Chairman Tim Brown, R-Crawfordsville, said he expects voucher advocates to seek more funding next year. But he appeared skeptical that money would be allocated for capital projects.

“We will have to consider the whole picture,” he said. “Lots of people in the House and Senate would likely be reluctant to take that next step. Private schools have the ability to spread some costs in other ways.”


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The Effects of School Vouchers on College Enrollment: Experimental Evidence from New York City

Access to education, Vouchers

Matthew M. Chingos and Paul E. Peterson

The Brown Center on Education Policy at Brookings | Harvard’s Program on Education Policy Governance

August 2012

Abstract: Most research on educational interventions, including school vouchers, focuses on impacts on short-term outcomes such as students’ scores on standardized tests. Few studies are able to track longer-term outcomes, and even fewer are able to do so in the context of a randomized experiment. In the first study using a randomized experiment to measure the impact of school vouchers on college enrollment, we examine the college-going behavior through 2011 of students who participated in a voucher experiment as elementary school students in the late 1990s. We find no overall impacts on college enrollments but we do find large, statistically significant positive impacts on the college going of African American students who participated in the study. Our estimates indicate that using a voucher to attend private school increased the overall college enrollment rate among African Americans by 24 percent.

The full paper can be accessed here.

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Socialist Vouchers for Education!!!

Education, Vouchers


Post independence India was characterized by socialistic ideology and has gradually transformed into a country which even after implementing liberalization reforms in the year 1991 is still averse to free market principles and capitalist economy. Western liberalism has not found its place in China as well mainly due to the repression by Communist Party. Hence, both the countries are devoid of any particular ideology per se. However, China is not clueless as India is! China has one earnest goal of “economic growth and development” and a dedicated path to achieve it even if it has to camouflage free market principles to suit its (assumed) socialist ideology! How?

In the year 1955, Milton Friedman in his essay “The Role of Government in Education” proposed the idea of a voucher for school choice to parents such that governments could finance education by making public funds available to private schools so that everyone has access to the latter.

On May 10, 2001, the Education Bureau of Changxing County announced the beginning of the implementation of the first education voucher system in China, thus adapting the system developed by Milton Friedman.  Four different kinds of education vouchers were issued: Civilian-run School Vouchers (worth 500 yuan (U.S. $65)), Vocational Education Vouchers (300 yuan (U.S. $39)), Poor Student’s Vouchers (200-300 yuan (U.S. $25-$39)), and Education Vouchers for Rural Skills Training. Changxing has issued 72 Civilian-run School Vouchers, 8,743 Poor Student Vouchers, 15,818 Vocational Education Vouchers, 787 Education Vouchers for civilian-run senior high schools, 624 Education Vouchers for ordinary high schools, and 11,150 Education Vouchers for Rural Skills Training.

Yes, the very policy tool which anyone would think to be the last thing that will be implemented by an authoritarian socialist country and an obvious tool a democratic andpresumably economically free country like India is expected to implement. However, expectations are not always met quite the desired way!

China has camouflaged this free market instrument in the following intriguing way.

  • China believes that vouchers mix equity with efficiency-”Priority to efficiency with due consideration to fairness” has been the main guiding principle for propagating choice.
  • Vouchers are deemed to provide for an effective financial resource scheme for the government as it is believed to reduce trade costs in processing of education funds.
  • Most fascinatingly, vouchers are deemed to facilitate exchange of property rights such that every citizen gets an equal right over public education funds for everyone is a taxpayer. This necessitates the government to subsidise private schools on people’s demand for choice. This is more like people spending their own money.
  • One more dimension that is persuasive to socialist thinking but which might not be ideal is that vouchers convert private schools into a new kind of “public” institutions such that government’s role now becomes that of “steering rather than rowing”. Hence the sacrosanct status awarded to public institutions might be spilled over to private entities as well.

Milton Friedman’s soul might be perplexed but must be happy!

China has adapted to what is needed for its development and has gone much ahead in the race while India still lives in oblivion by assuming that it is competing. However, the truth is that India does not even know how to compete.

This was originally posted on Spontaneous Order.

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Building a sustainable economy through education in Asia-Pacific region

Access to education, School Choice, Vouchers



The Asia-Pacific region in which India is situated has inherent riches in natural resources such as the oil banks in the Gulf counties, export strength of China, intellectual capital of India, and the research, development and production of the Pacific islands. This area has a projection of 7.5 per cent economic growth compared to 2.6 per cent of USA and 1.7 per cent of the European region.

In contradiction, the Asia-Pacific region also accounts for 60 per cent workers in the vulnerable economy, 422 million under the $2-a-day earning mark and 73 per cent of the world’s working poor. Overall, the worker output is still about one sixth of the level of America or the European Union. In addition to the widespread poverty and low productivity, there is persistent inequality between men and women; women earn less than men and are largely in unskilled and informal sectors; there is no social protection for the physically and mentally challenged and old people; no protection against occupational accidents, injuries and against child labour.

What is needed is an inclusive, balanced and sustainable plan in the coming decades for which education is a fundamental tool.

Skill and knowledge are the two driving forces for the economic and social development of any country. Countries with higher skills adapt better to challenges in the working arena. It has also been seen that during the economic downturn, countries with strong skill focus, like Korea, were more insulated than other parts of the world.

Besides the national policy of skill education, the idea of vocationalisation of secondary education was mooted in order to provide young adults with options to choose from, with an aim to improving individual employability. Since 1988, background work in this area with regards to building the curricula, teachers training and NGO funding has been going on. Reported 765 crores have already been spent in creating facilities for ten thousand students.

Vocational learning has always been considered tertiary education, and does not fall in the traditional definition of higher education. Concentrating on the age old apprenticeship style of learning, vocational studies include variety of subjects such as trade, craft, programmes that are technical in nature and are related to engineering, accountancy, nursing, medicine, architecture and pharmacy.

Going beyond vocationalisation of higher education the national policy of skill development aims at providing inclusive opportunities to men, women, rural, urban, organic, inorganic, traditional and contemporary.

Offering modular courses in open architecture of short term duration, its funding is through skill vouchers given to the candidates and it focuses on funding the institutions imparting training after the course is completed. Nearly 23,800 establishments are imparting education to around 2.58 lakh apprentices. Within the next 5 years, over 1 lakh establishments are expected to train over 1 lakh apprentices.

Several organisations such as the Centre for Rural Technology, Society for Rural Industrialisation (SRI) and the flagship National Skill Development Corporation (NSDC) besides the Prime Minister’s National Council on Skill Development are all involved in the implementation of such courses.

There is also a focus on improving women participation by nearly 30 per cent by overcoming barriers and facilitating participation, though hostels for women, scholarships, transport, loans and making available newer and contemporary fields like emerging technological services available to women, besides the traditional training in  health, construction and agriculture sectors.

NSDC has already trained nearly 90 thousand people, 80 per cent of whom are employed. With an annual budget outlay of Rs 1000 crores, it has doubled its capacity and enrolment since 2009 and has a target of training nearly 500 million by 2022.

If education is about employability, in order to sustain economic growth and to beat the widespread and rampant poverty, skill development seems to be the last word in achieving sustainability.

Manjula pooja shroff
The writer is  an entrepreneur and educationist

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Why choice matters?

Right to Education, Vouchers


The Financial Express

Held towards the end of January, the National School Choice Week saw a series of events and activities across the US held by parents, teachers, educationists and other individuals who are active supporters of choice in education. The public celebration of school choice was an attempt to bring to the fore the need for increased parental involvement in choosing schools for their children and the options that are available to them, something that is currently lacking in the Indian context.

What is school choice? It means that parents (and thereby students) have more choices in the number and variety of schooling options. It means not just having many private schools but schools catering to a spectrum of expectations the parents might have from the education system. In fact, students are the primary stakeholders in education—and as with any other service, it makes sense that the consumer is able to choose a service provider best suited to meet her needs and expectations.

In India, parental choice in education is limited, especially for our poorest citizens. Education is directly funded by the government and, as such, schools are accountable to the government and not the parents for their performance. Based on the yearly Annual Status of Education Report 2013 findings, performance of schools in terms of student learning outcomes has been steadily declining across both public and private schools, though the rate of decline in public schools is steeper.

Bringing the element of choice and competition into education has the important consequence of making schools accountable to parents, and leads to a more efficient schooling system, where poor performing schools are weeded out due to lack of patronage. Unfortunately, the cost of running a school in compliance with current regulations decreases the scope of innovation and competition, such as lack of autonomy in curriculum, teacher-hiring criteria, etc.

Another finding of ASER 2013 was an increase in private participation in education, as well as in enrolment in private schools for both rural and urban areas. The increase in enrolment in private schools from 2012 to 2013 has been very small (from 28.3% to 29%); however, since 2006, this increase has been steady. This shows that poor parents are voting with their feet, moving away from free government education towards fee-charging private schooling.

Currently, the RTE Act requires private schools to fulfil a number of conditions in order to receive government recognition. These conditions are primarily focused on inputs to education, such as pupil-teacher ratio, classroom size, drinking water and toilet facilities, etc. A study by Centre for Civil Society’s research team has demonstrated that for budget private schools, meeting these norms would require close to a four-fold hike in fees.

These low-fee schools function at almost one-third the cost of government schools (with equal or better learning outcomes), according to a study by education expert Prof Karthik Muralidharan from the University of California in San Diego. For now, they are the only alternative for poor parents who do not want public schooling for their children. Unfortunately, these private schools are being put out of parents’ reach either due to increase in fees, or through closure due to non-compliance with new norms. We need a system that enables and facilitates choice for parents, rather than restricting it.

How do we bring about choice in education? There are a number of models that have been adopted across the world to achieve this. The most common instrument is school vouchers, something we at CCS strongly advocate, whereby parents receive vouchers from the government, which they can take to empanelled schools, who will receive fees from the government for that particular student. This is a simple, effective way of increasing choice in education, while also promoting efficient use of public funds and preventing misuse by parents and schools.

Other models include conditional cash transfers and different variants of public-private partnerships such as Charter Schools in the US, Modern Schools proposed by the ministry of human resource development, the four-category PPP model proposed by the Mumbai Municipality and the Foundation Assisted Schools model in the Punjab province of Pakistan.

The entry of private aided schools is also a step up in terms of providing choice to consumers but the problem remains that since such schools are receiving money from the government, their accountability does not shift completely to the parents.

What we have right now under the RTE in the form of 25% reservation is another means of enhancing parental choice. Under this provision, parents from economically disadvantaged backgrounds are able to seek admittance of their children into private schools for seats reserved for them under the 25% quota. Schools then receive reimbursement of fees for these students from the government. The implementation of this provision has not yet been as effective as one would hope, given the complications arising with regard to conditions for selection and admittance of students, but it is still a marked improvement in terms of providing parents with alternatives to public schools (state-specific information on implementation of RTE 25% provision can be found at www.righttoeducation.in).

What we need is a system that puts the student at the centre of education, ensuring that they are learning and equipping themselves to be successful individuals in the future. The only way to create such a system is by making it accountable to the consumers who are partaking of the service. We must dilute the scope of state intervention in education and promote autonomy and choice for parents. Maybe it is time to have our very own ‘School Choice Week’.


The author is president, Centre for Civil Society

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Vouchers, Public School Response, and the Role of Incentives

Public Schools, School Choice, Vouchers

Rajashri Chakrabarti

Federal Reserve Bank of New York

Staff Report no. 306

October 2007

Revised November 2010

Abstract: This paper analyzes the incentives and responses of public schools in the context of an educational reform. The literature on the effect of voucher programs on public schools typically focuses on student and mean school scores. This paper tries to go inside the black box to investigate some of the ways in which schools facing the Florida voucher program behaved. The program embedded vouchers in an accountability regime. Schools getting an “F” grade for the first time were exposed to the threat of vouchers, but did not face vouchers unless and until they got a second “F” within the next three years. In addition, “F,” being the lowest grade, exposed the threatened schools to stigma. Exploiting the institutional details of this program, I analyze the incentives built into the system and investigate the behavior of the threatened public schools facing these incentives. There is strong evidence that they did respond to incentives. Using highly disaggregated school-level data, a difference-in-differences estimation strategy, and a regression discontinuity analysis, I find that the threatened schools tended to focus more on students below the minimum criteria cutoffs rather than reading and math. These results are robust to controlling for differential preprogram trends, changes in demographic compositions, mean reversion, and sorting. The findings have important policy implications.

Access the full paper at:


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School Choice, US, Vouchers

The Friedman Foundation – for Educational Choice



Much current discussion of educational vouchers takes it for granted that their primary aim is to improve education for low-income students in urban areas. That would indeed be one of the effects of the full-fledged adoption of vouchers, and it is certainly a worthy objective, but it is very far from the major objective, at least to this supporter of vouchers.

I have nothing but good things to say about voucher programs…that are limited to a small  number of low-income participants. They greatly benefit the limited number of students who receive vouchers, enable fuller use to be made of existing excellent private schools, and provide a useful stimulus to government schools. They also demonstrate the inefficiency of government schools by providing a superior education at less than half the per-pupil cost.

But such programs are on too small a scale, and impose too many limits, to encourage the entry of innovative schools or modes of teaching. The major objective of educational vouchers is much more ambitious. It is to drag education out of the 19th century—where it has been mired for far too long—and into the 21st century, by introducing competition on a broad scale. Free market competition can do for education what it has done already for other areas, such as agriculture, transportation, power, communication and, most recently, computers and the Internet. Only a truly competitive educational industry can empower the ultimate consumers of educational services—parents and their children.

– Milton Friedman

To read more: http://www.edchoice.org/School-Choice/The-ABCs-of-School-Choice/ABCs-Blue/2014-The-ABCs-of-School-Choice-Blue

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RTE: Learning outcomes more important than syllabus completion

Learning Achievements, Reservation of seats, Vouchers

Business Recorder


Meet Dr Parth Shah! He is an economist by profession who taught at the University of Michigan-Dearborn (US) and Jawaharlal Nehru University (India) between 1992 and 1998. In 1997, Dr Shah founded India’s top think tank called Centre for Civil Society (CCS).

Ranked amongst the world’s top 50 think tanks by ‘The Think Tanks and Civil Societies Programme’ at the University of Pennsylvania, CCS focuses on policy research and advocacy, with education on top of the list. CCS’s other areas of focus relate to economic freedom, livelihood, good governance and environment. The think tank is also credited with the launch of India’s first private-sector led education voucher scheme.

Dr Shah was visiting Pakistan on a tight schedule last week, when he managed to squeeze in an interview with BR Research between a roundtable on education voucher held by PRIME institute, Islamabad, sightseeing to Lok Virsa and a flight to Lahore for his eventual way back home.

THE FOLLOWING IS THE EDITED TRANSCRIPT: BR Research: You mentioned earlier at the roundtable that there is no fixed model of having an education voucher scheme. But, what if you were to generalise the factors that made certain programmes successful and others a failure?

Parth Shah: The biggest factor that plays a role in the success is the design of the programme. Voucher schemes are something you have to put in the existing system, so how you design the programme conceptually and how you implement it are critical. Second factor is how it aligns with the incentives of the people who are going to be administrating it. The third thing is commitment from the political system to make the programme successful.

BRR: What are the design elements common to most successful voucher schemes? PS: In general, the vouchers are customised to each area. For example, in some voucher programmes, there is no top-up allowed, which means you can only go to a school that charges exactly what the voucher amount is. And there are quite a few programmes which have no top-up policy.

The voucher design depends on many factors, the primary ones being the type of problem that you are trying to address by introducing vouchers and who is the key beneficiary of the programme. In addition to the design, there are differences in implementation. For example, if you have a robust IT system in the education department, then you don’t have to issue a physical voucher; you can just issue a number that can be verified across the terminals.

BRR: One practical challenge has been the identification of the beneficiaries. What has been India’s experience in this regard?

PS: Selecting the group of beneficiaries has always been a challenge. You can use the database of those who are pre-qualified as below or around the poverty line. That’s the first place to start.

There is a huge debate in India about how to identify the poor. People say if you include the wrong people: that’s less of a worry: at least all the deserving people are getting benefits, at the cost of only a few wrong people getting those benefits. But, if you exclude the right people, then it is a perverse system.

India is thinking along the lines that instead of defining who they are: you try to define who they are not. For instance, those who pay income tax are not qualified for the voucher scheme, and those who own a car or have credit cards do not qualify either. So, we keep excluding people from the general population over a period of time, and as these different datasets become better, our targeting would improve, without excluding anyone who is supposed to get the benefit.

BRR: Can private sector philanthropists, foundations and high net worth individuals roll out their voucher schemes in their respective localities? Has there been any experiment to integrate government voucher scheme with private sector philanthropy?

PS: It is a good idea, but it is not being done so far in the education sector. In the US, several privately-funded programmes exist. In India, we have a voucher programme in vocational training for skill development. Currently, this pilot programme is being run by the CCS in the state of Maharashtra. Through this platform you can come as an individual or you can come as a corporate and say, for example, that you run a refinery in this area and you want to ensure that every child in this area over the age of 15 has access to vocational training. You can give money to the voucher platform then that runs the programme on your behalf. A similar programme could be tried in education.

BRR: There are provisions in the Indian right to education law that private schools should ensure that at least 25 percent of their primary class strength belongs to poor and disadvantaged class and that the government will pay for their tuition via voucher scheme. How does this work and what are its intended and unintended consequences?

PS: In a sense, it’s the victory of the voucher idea that finally the government has realised that public money can go to private schools and support students. This is what the 25 percent scheme is about.

At the same time, I don’t like the idea of making it mandatory. The government should have kept it voluntary by proposing that “we are willing to offer you this much money per student, and from this group of students you can choose which students you want to admit in your school”.

When the government made it mandatory, the high-fee schools from around the country went to the Supreme Court and fought a long and hard battle on the premise that this is infringement of the right to practise their trade.

But, the Supreme Court decided that their argument wasn’t good enough because the government does require mandatory behaviour by businesses in other areas–such as hiring quotas, or quotas on higher education medical and engineering seats–and, therefore, it was ruled constitutionally valid.

BRR: Tell us a little more about your concerns with this 25 percent mandatory requirement!

PS: The thing is that some schools don’t really want it, and neither do rich parents. So, there is a threat to those students who are going to be enrolled in the scheme. The school might take those students because the law says it must, but it can discriminate against these poor students. Who will watch over these millions of students admitted under the scheme? The law is not going to protect all the time. So, a situation has been created where the supposed beneficiaries could inadvertently be harmed–the law of unintended consequences!

Schools need to be pro-active in integrating these students academically and socially. If the school is not pro-active, I really worry that in 2-3 years’ time, many of these kids may drop out for one reason or the other. It could be because of the adverse behaviour by the school, or because of the students’ realisation of the social gap, or simply because they will not be able to keep up with the remaining students, whose parents are educated, who have extra tuitions at home, etc.

BRR: How would making the requirement voluntary help?

PS: Making it voluntary would have mitigated some of these problems. That way, the school would have aligned itself with the requirements, it would have been ready for the change, the teachers and parents would have been ready, and there would have been a consensus already built within the school that the administration is going to do their best to ensure that these kids do well in their school. The school then works for the poor student, not against her.

Many use the example of forced integration of whites and blacks in the US and argue that compulsion is necessary to change social attitudes and practices. If you look closely, what happened in the US was that when the law outlawed racial selection at the school level, the racial selection changed to the neighbourhood level. People chose neighbourhoods that were white or black, so the discrimination in choosing the school just shifted to the discrimination in choosing the home.

BRR: Both India and Pakistan have passed the right to education laws. Do you consider education a right in the same sense as a right to life and property or would you have a different notion for it?

PS: At the philosophical level, there is an important distinction between rights and entitlements which is getting blurred. I would use the language of entitlements instead of rights for education or healthcare or employment. So, this is an entitlement that you are getting from the society. It’s not your right in the sense as is your right to life, liberty and property.

BRR: What does the right imply and where does the responsibility lie?

PS: Normally, it is the parents’ responsibility. That is how the world has been, except for the last century or so. But, in the rights’ language, it is the state’s responsibility.

BRR: Can the state force the kids to school?

PS: In Pakistan, yes. In India we don’t have any penalty for parents if their children are not in school. In the first draft of the RTE Act of India, the provision of penalty was there. There were monetary fines followed by prison; but we removed that clause.

If it is the child’s right given by the state, then, naturally, it is the state’s responsibility to ensure that children are in school–by making the school engaging and meaningful to children and parents.

In Pakistan, the RTE laws of Islamabad and Sindh both have penal clauses–monetary fine of about Rs 50,000. So, you have got to ask yourself: on one hand, the parents are so poor that they can’t send the child to school and now you are asking that poor parent to pay Rs 50,000 fine?!

BRR: What are you other findings about Pakistani laws?

PS: I am concerned about the requirement to complete the curriculum by the teacher. Both Pakistani and Indian laws say that the teacher has the obligation to complete the syllabus, which I think is the worst thing one can possibly do, at least in the primary education.

In primary education, the focus should be whether the child is able to read or not, whether she/he can do the maths or not that. Completing the syllabus does not really matter if the child cannot read nor can do elementary maths.

The legal requirements of making sure that teacher completes the syllabus are perverse. They undermine the larger purpose of education. What they should judge instead is the students’ ability to read and comprehend. The important thing is learning outcomes.

Then, quality is also talked about in the Pakistan laws. But, there is no independent definition of quality. So, I may guarantee you quality education; but what does that quality actually mean? Defining minimum standards of quality is important–and assessment of students should be based on those standards.

BRR: What does “free” mean and include in Indian RTE laws?

PS: It means that the tuition is free across the board. The rest varies from state to state depending upon their respective fiscal strengths. Some states also provide text books, note books. In addition to that, some states provide midday meals, uniforms and winter jerseys, while some of the states also provide transport.

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Show Me One Example of a National School Voucher Program that Works!…Okay: Sweden.


Andrew Humphries

We know markets lead to innovation, increased quality, and falling costs.  Freedom is the sin qua non of innovation in every sector. If someone thinks she can do a better job, she should be free to try.  The market will sort those that really do do better from those that don’t and channel resources to the more successful enterprises.

Some complain that you can’t compare cell phones with schooling. Yes, of course, cell phones and computers are different from education.  Yet there is something essentially the same about them: they are provided by fallible human beings.  Does anyone doubt that there are ways in which education can be improved?  Does anyone doubt that some individuals have more knowledge and better insight into pedagogical methods and managerial practices than others? Competition is not just the pressure to do better than others to keep your customers.  It is also the process of trial and error and selection of variations that offer improvement.  A free market means the freedom to provide alternatives in competition with established  players and the freedom for consumers to choose among available options.  As the Noble Prize winner F. A. Hayek argued, the primary value of competition is the role it plays as a discovery procedure.

However, despite the clear rationale and ample experience in different sectors, people doubt the power of freedom and competition to deliver the goods. Thankfully, there is a case study that gives powerful evidence that the same logic that leads to improvement and falling costs in every other sector also applies to education. Sweden has employed a universal voucher system since 1992.  Although the state funds every student’s education with tax funds, entrepreneurs are free to compete for those funds and families are free to choose where they send their children to school.

In an interview about Sweden’s experience with universal school choice system (here) Thomas Idergard, Program Director of Welfare and Reform Strategy Studies at Timbro, a free-market think tank based in Stockholm comments:

“Since the 1970s, the Swedish school system had declined regarding quality and student attainment. One reason for this was the lack of choice. Only the very rich, who could afford private schools with private tuition fees on top of our very high taxes, had a right to choose. For all the rest, the school was one monolithic organization in which all students were considered to have the same needs and to learn the same way. The lack of choice created a lack of innovation regarding pedagogical concept and ways of learning adapted to different students’ needs. Public schools, run by politicians in the local branch of government (cities and municipalities), were all there was for 99 percent of all students.

“The school voucher program was designed to create a market—with competition, entrepreneurship, and innovation—based on the Swedish and Scandinavian tradition of social justice and equality: All families should be able to choose between public and private schools regardless of their economic status or wealth. This equal opportunity philosophy, taken into its full potential, created an education market!…

“Through our universal school choice model, we combine the social dimension (taxpayer money should fund education for all) with the principles of the free market: The clients’ choices decide how the funding should be distributed and providers compete for clients’ satisfaction, which is ultimately materialized in concrete educational results, in order to get their revenues.”

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The Effects of School Vouchers on College Enrolment: Experimental Evidence from New York City

Higher Education, Vouchers

Matthew M. Chingos and Paul E. Peterson

The Brown Center on Education Policy at Brookings
Harvard’s Program on Education Policy and Governance

Executive Summary

Most research on educational interventions, including school vouchers, focuses on impacts on short-term outcomes such as students’ scores on
standardized tests. Few studies are able to track longer-term outcomes, and even fewer are able to do so in the context of a randomized experiment. In the first study using a randomized experiment to measure the impact of school vouchers on college enrollment, we examine the college-going behaviour through 2011 of students who participated in a voucher experiment as elementary school students in the late 1990s. We find no overall impacts on college enrolments but we do find large, statistically significant positive impacts on the college going of African American students who participated in the study. Our estimates indicate that using a voucher to attend private school increased the overall college enrollment rate among African Americans by 24 percent. The original data for the analysis come from an experimental evaluation of the privately funded New York School Choice Scholarships Foundation Program (SCSF), which in the spring of 1997 offered three-year scholarships worth up to a maximum of $1,400 annually to as many as 1,000 low-income families with children who were either entering first grade or were public school students about to enter grades two through five. A recipient could attend any one of the hundreds of private schools, religious or secular, within the city of New York. According to the New York Catholic archdiocese, average tuition in the city’s Catholic schools, the city’s largest private provider, was estimated to be $1,728, which was 72 percent of the total per pupil cost of $2,400 at these schools (compared to total costs of more than $5,000 in the public schools).

The impetus for the voucher program was an invitation issued by Cardinal John J. O’Connor, Archbishop of New York, to Rudy Crew, Chancellor of the New York City public school system, to “send the city’s most troubled public school students to Catholic schools” and he would see that they were given an education. When New York City Mayor Rudolph Giuliani attempted to raise the funds that would allow Catholic schools to fulfill the offer made by the Cardinal and enroll the “most troubled” students, his proposal encountered strong opposition from those who saw it as a violation of the First Amendment’s establishment clause. As the controversy raged, a group of private philanthropists created SCSF, which announced that it would cover a portion of the costs of the private education of eligible students. SCSF gave students a choice of any participating private school in New York City. It offered a chance to win a scholarship to all elementary students from low-income families who were currently attending public schools in grades 1 through 4 or about to enter first grade.

SCSF asked an independent research team to conduct an experimental evaluation of the impact of the intervention on student achievement and other outcomes, such as school climate and school quality, as identified by responses to questions asked of the adult accompanying the child to the testing session. To participate in the lottery, students other than those who had yet to begin first grade were required to take a standardized test. While students were taking the test, the parent or other adult accompanying the child provided information verifying eligibility and filled out detailed questionnaires that posed questions about the child’s family background and the current school the child attended. Crucially, all families were asked to supply identifying information for each child applying for a scholarship, including name, date of birth, and social  security number.
The original evaluation of the SCSF program estimated impacts on student test score performance. We extend that evaluation by estimating impacts of the offer of a voucher on various college enrollment outcomes: 1) enrollment within three years of expected high school graduation; 2) full-time enrollment within three years; 3) enrollment in two-year and four-year colleges; 4) enrollment in public and private colleges; and 5) enrollment in selective colleges.

Information on college enrollment available from the National Student Clearinghouse (NSC) is linked to student identifiers and other data collected at the time when students who applied for an SCSF scholarship attended sessions where eligibility was confirmed. Almost all colleges and universities in the U.S., representing over 96 percent of all college students, submit enrollment information on their students to NSC. The NSC provides participating institutions with enrollment and degree verification services as well as data for research purposes.
Voucher applicants were matched to NSC records using social security number (SSN), name, and date of birth. Because identifying information was collected prior to the inclusion of applicants in the lottery and because NSC has such an extensive database, the attrition problems that have plagued school choice evaluations in the past are almost entirely eliminated. Of the 2,666 students in the original study, the information needed to match the data was available for 2,642, or 99.1 percent of the original sample. We focus on enrollments within three years of expected high school graduation, because the most recent enrollment data available are for fall 2011, a date when the youngest cohort was just three years from their expected graduation date.

To read more, click: http://www.hks.harvard.edu/pepg/PDF/Impacts_of_School_Vouchers_FINAL.pdf

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