School voucher

School voucher

A school voucher, also called an education voucher, is a certificate issued by the government by which parents can pay for the education of their children at a school of their choice, rather than the public school (UK state school) to which they are assigned.


School vouchers were used in the 1960s after school integration by some Southern states in the U.S. as a method of perpetuating segregation. In a few instances, public schools were closed outright and vouchers were issued to parents. The vouchers, in many cases, were only good at privately segregated schools, known as segregation academies. [ [,1249,660226540,00.html Deseret Morning News | Do vouchers equal segregation? ] ]

Economist Milton Friedman argued for the modern concept of vouchers in the 1950s, stating they'd promote competition and improve schools. Vouchers have since been introduced in countries all over the world but are controversial as they reflect political and ideological splits as well as the role of unions in education.



Proponents assert that voucher systems would promote free market competition among schools of all types, which would provide schools incentive to improve. Successful schools would attract students, while bad schools would be forced to reform or close. The goal of this system is to localize accountability as opposed to relying on government standards.

Under non-voucher education systems citizens that currently pay for private schooling are still charged taxes that are used to fund public schools, arguably their cost for education is two-fold as they are funding both public and private schools simultaneously. Vouchers are designed to provide citizens freedom to spend their tax money as they choose for the type of school they want. [ ( [] )] This causes controversy as it puts public education in direct competition with private education, threatening to reduce public school funding if parents choose to withdraw their children in favor of a private school. Proponents argue that competition through free market capitalism would increase the quality of education for both private and public education sectors as it has for state universities, manufacturing, energy, transportation, parcel postal (UPS, FedEx vs. USPS) sectors of government that have historically been socialized and opened up to free market competition. [ ( [] [] )] [] Frequently, institutions are forced to operate at higher efficiencies when they are allowed to compete [ ( [] ) ] and any loss of supply and demand for public institutions would be offset and equalized by the increased demand for private institutions. For example, if the demand for private schools increased, they would need to hire more teachers and staff to compensate for their increased growth, so any jobs lost from the public sector would be offset by jobs gained in the private sector. [ ( [] ) ]

Proponents also note that school vouchers would allow for greater economic diversity by offering lower income students opportunities to attend previously unaffordable private schools. School voucher proponent and Nobel Prize winning economist Milton Friedman observed that the poor have an incentive to support school choice, as their children attend substandard schools, and would thus benefit most from alternative schools. Friedrich von Hayek explains:

:"As has been shown by Professor Milton Friedman (M. Friedman, The role of government in education,1955), it would now be entirely practicable to defray the costs of general education out of the public purse without maintaining government schools, by giving the parents vouchers covering the cost of education of each child which they could hand over to schools of their choice. It may still be desirable that government directly provide schools in a few isolated communities where the number of children is too small (and the average cost of education therefore too high) for privately run schools. But with respect to the great majority of the population, it would undoubtedly be possible to leave the organization and management of education entirely to private efforts, with the government providing merely the basic finance and ensuring a minimum standard for all schools where the vouchers could be spent." (F. A. Hayek, The Constitution of Liberty, section 24.3)

Other influential supporters include Newark Mayor Cory Booker, Illinois business man and politician Jim Oberweis [] , South Carolina's current governor Mark Sanford [] , billionaire and American philanthropist John T. Walton [] , Former Mayor of Baltimore Kurt L. Schmoke [] , Presidential Candidate John H. Cox [] , Presidential Candidate Mitt Romney [] as well as Presidential candidate John McCain claim that, "School choice stimulates improvement and creates expanded opportunities for our children to get a quality education." []

The Liberty and Democracy Party supports vouchers as a stepping-stone to abolishing public schools. LDP spokesman Shem Bennett said, "Initially some public schools would remain. But under the LDP’s plan, schools would slowly privatise and diversify as there’d be no need for government ownership." [ [ Abolish Public Schools] . LDP press releases.]

The [ Friedman Foundation for Educational Choice] , founded by Milton and Rose Friedman in 1996, is a non-profit organization that promotes universal school vouchers and other forms of school choice. In defense of vouchers, it cites empirical research showing that students who were randomly assigned to receive vouchers had higher academic outcomes than students who applied for vouchers but lost a random lottery and didn’t receive them; and that vouchers improve academic outcomes at public schools, reduce racial segregation, deliver better services to special education students, and do not drain money from public schools. [ [ Forster, Greg. (2007) Monopoly Versus Markets] ]


Among the strongest critics are teacher unions, [( [] )( [] )Teacher unions fight to stop vouchers] most notably the National Education Association (the largest labor union in the USA) who has spent millions litigating and lobbying against vouchers for concern that it could erode educational standards, reduce funding, and ultimately cost public teachers their jobs as students leave public schools for private schools. [ ( [] ) ( [] )List of NEA beliefs and legal fights against vouchers] Critics of the voucher system note that it is possible to have a choice between different schools within the "public" school system without vouchers. One reason given for being allowed to choose private schools is the belief that private schools offer better education -- a belief disputed in a 2006 Dept. of Education study. [( [] ) Dept. of Education] This report concludes that average test scores for reading and mathematics, when adjusted for student and school characteristics, tend to be very similar among public schools and private schools although private schools do slightly better in both.One argument against vouchers is that, given the limited budget for schools, a voucher system weakens public schools while at the same time not necessarily providing enough money for people to attend private schools. The opponents assert a tendency of the costs of tuition to rise along with its demand, which would compound the problem. However, that assumes there would not be an increase in supply.

Some critics assert that a voucher is like a discount coupon for those who can already afford the full cost of a private school education. According to the National Conference of State Legislatures, 76% of the money handed out for Arizona’s voucher program has gone to children already in private schools. [cite book | last=Palast | first=Greg | title=Armed Madhouse (No Child's Behind Left) | url= | publisher=Dutton Adult | year=2006 | isbn=0525949682]

In the U.S., some critics believe school vouchers are a violation of the United States Constitution's establishment clause, which says, "Congress shall make no law respecting an establishment of religion," as many voucher programs would allow children receiving vouchers to attend church-run schools. However, the Supreme Court in "Zelman v. Simmons-Harris" (2002) rejected this argument.

Some economist critics point to the problem of "cream skimming," a variety of adverse selection in the educational marketweasel-inline. With a greater pool of applicants, the private schools could be more selective over which students to admit, excluding those who do not belong to a preferred group (for instance, religion or ethnicity), those with disabilities such as autism or multiple sclerosis, and those with disciplinary problems.Fact|date=August 2007 By law, the public schools must accept any student. So that they would presumably end up with all students whom the private schools turn away for such reasons. [cite news|title=The Gifted Children Left Behind |author=Susan Goodkin and David G. Gold |work=Washington Post |date=2007-08-27 |url= |accessdate=2007-08-27] This would likely further undermine the reputation and competitiveness of the public schools, leading to a vicious circle that tends toward the total abolition of the public schools and perhaps the end of universal education. Although since the school would essentially become a business, just like any other business; discrimination by race, social class or religion would be illegal and thus force schools to claim that the student simply didn't meet their standards or more likely, simply avoid saying why they wouldn't take such a student thus allowing such abuses. Just as a medical doctor cannot reject a patient based on such discrimination neither could a school openly reject a prospective student. However, as in the case of health care, rejection on monetary terms would still exist, and this is likely to discriminate in a similar manner as economic theory would suggest.

Other opponents in the U.S. object on different grounds. They believe that granting government money, even indirectly, to private and religious schools will inevitably lead to increased governmental control over non-government education, and possibly over the teachings of the sponsoring religious group (most often a church). Individuals who oppose vouchers on these grounds are often libertarian; most also call for the abolition of all state sponsorship of education, which they believe to be wrong in principle.Fact|date=August 2007 The Alliance for the Separation of School & State opposes education vouchers on the grounds that "if vouchers become commonplace, private and religious schools will become more and more like public schools." [cite web|url=|title=What about tax-funded vouchers, tax credits, and charter schools?|accessdate=2006-04-21] Moreover, they suggest that if it is wrong in principle for the government to tax in order to fund public education, then one should not accept any portion of the ill-gotten money to fund private education. [cite journal |url= |title=Voucher Envy |author=Nathan Wilson |journal=Credenda/Agenda |issue=3 |volume=10 |accessdate=2007-08-27 ]


In general, education is a rivalrous good. [Hammer, Jeffrey - [ Public Economics of Education] ] That means that only one person can enjoy each education spot. Exceptions to this include some examples of the use of technology in education (educational resources) - such as Wikipedia. Since Wikipedia is a web site, its availability to use by a given student (or group) does not necessarily reduce its availability to another. But traditional classroom education does tend to be a rivalrous good.If there are twenty places for students in a class and the quality of teaching isn't compromised, students can only be aggregated if only a limited number are taken. However, competition may ensure this problem is leviated through a free-market. Where demand exists (from the parents and students not able to attend existing private schools), new entrepreneurs are free to experiement with the result new schools opening to accommodate their demand. It is also an excludable good, because someone could, theoretically, easily be prevented from attending classes offered. With such characteristics, education can be classified as a private good, which are, according to economic theory, usually better provided by the market than by the government. But education is a service that contains several positive externalities, which is why the government chooses to fund it.

However, the importance of government funding for education does not imply that the government should run its own schools. In general, to subsidize a good, there are two broad choices: subsidize producers or subsidize consumers.

For example, a producer food subsidy might have a government run store that distributes potatoes to every qualifying poor person. If the individual doesn't like potatoes, too bad. On the other hand, an example of a consumer food subsidy would be the federal food stamps program. Qualifying poor people get to choose (within limits) the food that they want and the government pays for it. With a consumer subsidy (food stamps), a poor person can buy more food and more of the food they want. Back in the arena of education, the government run school system is a producer subsidy while a school voucher would be a consumer subsidy. Because education is not perfectly rivalrous nor excludable (depending on school policies), this theory is debatable.

The rationality of the consumer is also arguable, as highest utility for the consumer may not be socially optimal. In theory, a consumer subsidy gives individuals power to choose what they want, which does not necessarily entail better education, but possibly grade inflation and shortcutting. However this may be a temporary problem since in a free-society the free flow of information will allow parents and students to evaluate which schools are performing well and those which are "cheating". As a result of the market, bad schools that engage in grade-inflation and other low quality schemes will readily and easily wither away. If consumers have the freedom to look up information on truly well-preforming schools and those that merely cheat or have bad performance, these objections will have much weight. When such students enter the workforce their performance will theoretically be worse, causing "lower" efficiency in the long run. However, this argument rests on the assumption that purchasers of education are seeking a degree rather than knowledge. Moreover, even if degree-seeking is the primary motive of education, a degree from a rigorous and reputable school or program often holds more value than one from an institution known to be lax or lacking, and this provides motivation not to simply choose the easiest curriculum available. Presumably at the elementary and secondary levels, decisions (when choices are offered) will be made by parents of students. Of course, they may give some consideration to the desires of their sons and daughters. In post-secondary education, students typically decide for themselves between those schools that are both affordable and willing to accept them for admission, although perhaps relying partly on advice and funding from others such as parents.

Many concerns or criticisms regarding school vouchers are not leveled strictly at their implementation, but rather are in favor of a significant degree of government regulation concerning how they are spent.

The argument that education is a private good is based on the failure to differentiate education from public education. Education refers merely to the teaching of individual students for their own benefit. Public education refers to the goal of educating the entire public for their own benefit and the benefit of society as a whole. Looked at from this point of view, public education is a public good. This interpretation is arrived at by looking at society as a whole as benefiting from the education (or suffering from the lack of education) of its citizens. Few people would argue that an uneducated citizenry is preferable to an educated one. Educated citizens are more likely to contribute to society and less likely to require social support. This benefit is neither excludable nor exhaustible. A better educated citizenry improves conditions in the entire society, and everyone in the society benefits from those improved conditions. Since markets tend not to produce public goods, the argument is that the government should provide public education.

Empirical proof for the model of public education as a public good is abundant. Private schools operating in the free market have restrictive admission policies. Practically no private firms provide public education. The few that do are actually publicly funded: students who transfer in from public schools pay their tuitions with vouchers. There are charitable foundations that send children to private schools, but they do not provide access for the public at large and are therefore not providing public education



In Britain, The Conservative Party proposed a policy similar to Chile's during the 2005 general election. It was blamed by many for their subsequent defeat after being the subject of a negative election broadcast (similar to an "attack ad") by the winning Labour PartyFact|date=June 2007.

However, it has been pointed-out in the Economist (Jun 30th 2005 - Toddlers and taboos: What counts as heresy in schools is normal in nurseries) that a voucher system has already been unproblematically introduced in Britain for funding pre-school education: they argue it has been lower in costs, greater in efficiency and generative of less bureaucracy than state provision. In principle, this system might be extended to school age educational provision.


In Chile, there is an extensive voucher system in which the State pays private and municipal schools directly based on student assistance. This system covers nearly 90% of its students. While studying the private school system, however, Dr. Martin Carnoy of Stanford, Patrick J. McEwan and others have found that when controls for the student's background (parental income and education) are introduced, the difference in performance between public and private subsectors is not significant. Alejandra Mizala and Pilar Romaguera.(University of Chile) have found that there is greater variation within each subsector than between the two.Fact|date=June 2007. Municipal Schools are more costly per student, in addition to the voucher they usually receive additional funds from the municipality itself, and also there is a regional investment program (FNDR)that provides founds for municipal schools.


In most European countries, education for all primary and secondary schools is fully subsidized. In some countries, parents are free to choose which school their child attends. Schools are often funded on a grant system based on the number of students on their rolls.


Most schools in Ireland are State-aided parish schools, established under diocesan patronage but with capital costs, teachers salaries and a per head fee paid to the school [Irish Government Department of Education website" [] ] . There is a recent trend towards multi-denominational schools established by parents, which are organised as limited companies without share capital. Parents and students are free to choose their own school. In the event of a school failing to attract students it immediately loses its per-head fee and over time loses its teaching posts- and teachers are moved to other schools which are attracting students. The system is perceived to have achieved very successful outcomes for most Irish children [OECD report on Irish Education" [] ] . The 1995-7 Rainbow Coalition (which contained parties of the centre and the left) introduced free third-level education to primary degree level. Critics of the latter development charge that it has not increased the number of students from economically deprived backgrounds attending university. However, studies have shown that the removal of tuition fees at third level, has increased the number of students overall and those from lower socio-economic backgrounds. This concurs with evidence from the UK of a decrease in attendance numbers after the introduction of fees.


In Sweden, the conservative government that held office in 1991-1994 introduced a voucher system at primary and secondary school level, enabling free choice among public and independent schools ("friskolor") in the community. The system gained such immediate popularity that the succeeding Social Democratic government found it impossible to revert the reform although they have always held strongly negative views on "private" schools. The only major change the new Social Democratic government were able to institute after 1994 was to prohibit extra fees beyond the value of the voucher - this measure was designed to counteract social segregation in the private schools. Overall, public support has remained strong - segregation has not increased, and various educational models have been able to establish themselves on a broader basis (most notably, the independent Montessori schools have also influenced the educational model of the public schools).

In 2006, 7% of Swedish primary school students and 13% of secondary school students attended private schools.

The Netherlands

In the Netherlands, the government funds "bijzondere" ("special") schools, which are run by independent non-profit boards, on the condition that they charge no more tuition than public schools do and otherwise abide by practically the same rules as public schools. Parents are free to choose any public or special school for their children, although in some urban areas, such as Amsterdam, admissions procedures do exist. Many, but not all, special schools are religious in nature. The system arose in the early 1900s after a prolonged battle (the "school feud") between religious and secular political parties, and is considered a political third rail even today. The emergence of Islamic schools is putting the issue back into the spotlight, though. Any voucher proposals in The Netherlands, and countries with similar systems such as Belgium, are complicated by the historical school feud reality.

Hong Kong

A voucher system for 3 to 6 years olds attending non-profit making kindergarten will be implemented in Hong Kong starting 2007. Each child will get HK$13000 pa. The $13000 subsidy will be separated into two parts. $10000 is used to subsidize the school fee and the remaining $3000 is used for kindergarten teachers to pursue further education and obtain a certificate in Education. Also, there are some restrictions on the voucher system. Parents can only choose those non-profit making with yearly fee less than $24000. It is hoped by the government that by the year of 2011-2012, all kindergarten teachers can obtain a certificate in Education and the government will adjust the subsidy amount to $16000 for each students and all of the money is for the school fee subsidy.

Milton Friedman criticised the system, saying "I do not believe that [CE] Mr. Tsang's proposal is properly structured". He said that the whole point of a voucher system is to provide a competitive market place, therefore, it shouldn't be limited to non-profit kindergartens.

After protests by parents with children enrolled in for profit kindergartens, the program was extended to children in for- profit kindergartens, but only for children enrolled in or before September 2007. The government will also provide up to HK$30000 subsidy to for profit kindergartens wanting to convert to non profit.

United States

In the 1980s, the Reagan administration pushed for vouchers, as did the current Bush administration in the initial education-reform proposals leading up to the No Child Left Behind Act. So far, voucher programs have persisted only in about half a dozen states and districts; most are offered to students in low-income families, low performing schools, or special-education programs.

The city of Milwaukee, Wisconsin led the way in 1990 and now has nearly 15,000 students using vouchers. The 2006-2007 school year will mark the first time in Milwaukee that more than $100 million will be paid in vouchers. [cite web|url=|title=Vouchers to Pass $100 Million Mark, Milwaukee Journal Sentinel, Nov. 21, 2006|accessdate=2006-11-21] Twenty-six percent of Milwaukee students will receive public funding to attend schools outside the traditional Milwaukee Public School system. In fact, if the voucher program alone were considered a school district, it would mark the sixth-largest district in Wisconsin. St. Anthony Catholic School, located on Milwaukee's south side, boasts 966 voucher students, meaning that it very likely receives more public money for general school support of a parochial elementary or high school than any before it in American history. Under the current state formula for paying school vouchers, however, Milwaukee residents pay more in property taxes for voucher students than for students attending public schools. This imbalance has received considerable criticism, and is the subject of 2007 legislative proposals designed to alter the formula.

The school voucher question in the United States has also received a considerable amount of judicial review in the early 2000s.

A program launched in the city of Cleveland in 1995 and authorized by the state of Ohio was challenged in court on the grounds that it violated both the federal constitutional principle of separation of church and state and the guarantee of religious liberty in the Ohio Constitution. These claims were rejected by the Ohio Supreme Court, but the federal claims were upheld by the local federal district court and by the Sixth Circuit appeals court. [cite web|url=|title=Legal Summary of U.S. Supreme Court decision in Zelman v. Simmons-Harris, 436 U.S.|accessdate=2006-04-21] The fact that nearly all of the families using vouchers attended Catholic schools in the Cleveland area was cited in the decisions. [cite news|url=|accessdate=2006-04-21|title=Supreme Court affirms school voucher program|first=Terry|last=Friden|date=July 27 2002] In a 2002 ruling in the case "Zelman v. Simmons-Harris", the Supreme Court of the United States ruled in a 5-4 vote that the Ohio program was constitutional. The justices cited the private choice made by the parents and affirmed that the ultimate purpose (improving elementary education) was secular.

In 2006, the Florida Supreme Court struck down legislation known as the Opportunity Scholarship Program (OSP), which would have implemented a system of school vouchers in Florida. [cite web|url=|accessdate=2006-04-21|title=Court Throws Out Florida School Voucher Program] The court ruled that the OSP violated article IX, section 1(a) of the Florida Constitution: "Adequate provision shall be made by law for a uniform, efficient, safe, secure, and high quality system of free public schools." [cite web|url=|accessdate=2006-11-01|title=Florida Supreme Court Official Opinion: SC04-2323 – John Ellis “Jeb” Bush, Etc., Et Al. v. Ruth D. Holmes, Et Al.]

Political support for school vouchers in the United States is mixed. On the left/right spectrum, conservatives are more likely to support vouchers. Some state legislatures have enacted voucher laws. As of 2006, the federal government operates the largest voucher program, for evacuees from the region affected by Hurricane Katrina.Fact|date=February 2007

Some public opinion surveys show that support for vouchers has increased in the last few years, [cite web|url=|title=Polling|accessdate=2006-07-21] although just how much is debatable. Majorities seem to favor improving existing schools over providing vouchers, yet as many as 40% of those surveyed admit that they don't know enough to form an opinion or don't understand the system of school vouchers. [cite web|url=|title=Public Agenda Online, "Red Flags on Education: Lack of Knowledge About Vouchers."|accessdate=2008-07-25]

In November 2000, a voucher system proposed by Tim Draper was placed on the California ballot as Proposition 38. It was unusual among school voucher proposals in that it required neither accreditation on the part of schools accepting vouchers, nor proof of need on the part of families applying for them; neither did it have any requirement that schools accept vouchers as payment-in-full, nor any other provision to guarantee a reduction in the real cost of private school tuition. The measure was defeated by a final percentage tally of 70.6 to 29.4.

A state-wide universal school voucher system providing a maximum tuition subsidy of $3000 was passed in Utah in 2007, but voters repealed it in a statewide referendum before it took effect. [cite web|url=,5143,695225580,00.html|title="Vouchers Killed"|accessdate=2007-11-03]

In Pittsburgh, Pennsylvania the privately funded Extra Mile Education Foundation has had very positive results with using private donations to pay the tuition for low income African-American children to attend private Catholic schools. No tax money is used for the vouchers. Most of the students who are enrolled in the program are non-Catholic. 70% of the students come from families whose income is low enough to qualify for free or reduced priced lunches. Of the students who graduate from the program (i.e., from 8th grade), not a single student has ever failed 9th grade, and 96% of the students graduate from high school within 4 years. []




*cite web|url=|title=Voters Repeatedly Reject Vouchers, National Education Association|accessdate=2006-04-21
*cite web|url=|title=What about tax-funded vouchers, tax credits and charter schools? Alliance for the Separation of School & State|accessdate=2006-04-21
*cite book|first=Joseph E|last=Stiglitz|title=Economics of the Public Sector|publisher=Stanford University|edition=3rd|id=ISBN 0-393-96651-8
*cite web|url=|title=West, Edwin G. "Education Vouchers in Principle and Practice: A Survey" The World Bank Research Observer, February 1997

External links

* [ The Ten Principles of School Choice] The Heartland Institute.
* [ National Education Association, School Vouchers] (NEA's position)
* [ School Vouchers: The Wrong Choice for Public Education] (The Anti-Defamation League's position)
* [ Voucher Strategy Center] The National School Boards Association provides information including the legal and educational arguments against vouchers, as well as state-by-state data on the status of voucher legislation.
* [ Peabody, Michael. "The Lure of School Vouchers," Liberty Magazine, July/August 2000.] Argues that acceptance of vouchers would introduce governmental regulation of parochial school curriculum.
* [ "On Thin Ice: How Advocates and Opponents Could Misread the Public's Views on Vouchers and Charter Schools," Public Agenda, 1999] Public opinion study that concluded most Americans did not understand the voucher concept, even in communities that already had such programs.
* [ The Friedman Foundation for Educational Choice] has substantial information on school choice.
* [ Milton Friedman, "Public Schools: Make Them Private," 1995]
* [] 20/20 Report on the American public school system
* [] The Great School Voucher Hoax - article on the "discount coupon" effect of school vouchers.
* [ faircompare, "What's up with Utah Referendum 1?," 2007]

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