Working Papers

This paper offers a specific analysis of the Colombian voucher plan, or the Programa de Ampliación de la Educatión Secundaria (PACES). The paper is dedicated to an examination of the Colombian context and a full outline of the voucher program, including its finance, regulation and support service provisions. These three policy tools can be used to affect specific goals and outcomes of a voucher program. A third section provides a method for evaluation of program outcomes, and a fourth discusses results. Section five provides a brief look at how Columbia has progressed after the voucher program and offers conclusion.

This paper summarizes the trend toward introducing markets into the education sector. We begin with a brief history of the market reforms and then review recent policy developments related to vouchers, charter schools, tuition tax credits, and educational management organizations. The internal anatomy of markets is then described, recognizing both the possibility of imperfect competition and of market failure. Next, we set out a framework for evaluating market reforms which has four criteria – freedom of choice; productive efficiency; equity; and social cohesion – and a set of three policy instruments – finance, regulation, and support services. We then show how voucher policies can differ considerably in how they satisfy each of the four criteria, although unavoidably trade-offs must be made. We then review the evidence on vouchers and choice in relation to each of the four criteria. Finally, we consider what are the prospects for market approaches to education and where are the needs for further research.

This paper reviews the research on school supply and reports on recent data from the Milwaukee Parental Choice Program (MPCP), to inform debates about school choice. The MPCP data indicate that about 30% of participating schools are secular, with the remainder religiously affiliated (although most of these religious schools are Catholic, this number is falling over time). About one-third of voucher students attended secular schools, another third attend Catholic schools (down from 48% in 1998), and the remaining third attend other religious schools. Increasingly, voucher student enrollments are a majority within their school: by 2001, 40% of participating schools have more than 80% of their students claiming vouchers. The supply of new schools appears elastic: 46% of participating schools were founded after the Program was introduced. Explaining this supply behavior in terms of school revenues is complex, however. Many schools report costs above the value of the voucher, and costs only weakly converge to the voucher amount. Plausibly, schools with higher proportions of voucher students do track their costs more closely to the value of the voucher. The implications of this evidence for school choice policies are discussed.

This paper reviews the regulations involved in the Colorado Opportunity Contract Pilot Program. The discussion of the regulations refers to finance, eligibility, and support services. Four criteria are applied to the program: does it offer freedom of choice? Will it promote efficiency? Is it fair? Does it promote the social good?

This paper examines the capitalization effects of public school choice programs. Under an inter-district open enrollment program, one would expect changes in local property values caused by the weakening of local monopolies for the provision of free schooling. Using data from Minnesota, I find that property tax bases decline in desirable districts that accept transfer students, whereas property tax bases increase in districts where students are able to transfer to preferred districts. The capitalization effects are of sufficient magnitude that a district losing students because of transferring may not actually lose much financially, or may even have a moderate gain, as a result of school choice. The converse is true for a district gaining transfer students. These effects may undermine attempts to use a school choice program as a means of financially punishing or rewarding districts based on preexisting differences in popularity.

This paper reexamines data from the New York City school choice program, the largest and best implemented private school scholarship experiment yet conducted. In the experiment, low-income public school students in grades K-4 were eligible to participate in a series of lotteries for a private school scholarship. Data were collected from students and their parents at baseline, and in the Spring of each of the next three years. Students with missing baseline test scores, which encompasses all those who were initially in Kindergarten and 11 percent of those initially in grades 1-4, were excluded from previous analysis of achievement, even though these students were tested in the follow-up years. In principle, random assignment would be expected to lead treatment status to be uncorrelated with all baseline characteristics. Including students with missing baseline test scores increases the sample size by 44 percent. For African American students, the only group to show a significant, positive effect of vouchers on achievement in past studies, the difference in average follow-up test scores between the treatment group (those offered a voucher) and control group (those not offered a voucher) becomes statistically insignificant at the 0.05 level and much smaller if the full sample is used. In addition, the effect of vouchers is found to be sensitive to the particular way race/ethnicity is defined. Previously, race was assigned according to the racial/ethnic category of the child's mother. If children with a Black (non-Hispanic) father are added to the sample of children with a Black (non-Hispanic) mother, the effect of vouchers is smaller and statistically insignificant at conventional levels.

This short note reviews the possibilities of voucher programs, in light of the US Supreme Court ruling of June 2002.

We derive an improved methodology for linking theoretical parameters of a political economy model of school choice to empirical values estimated by regressing local private enrolment shares on mean income, the median to mean ratio, religious and ethnic composition, and other variables. This leads us to reject the commonly maintained assumption that a coalition of “ends against the middle” determines local school funding, and to conclude instead that the median income voter is decisive. It also allows us to estimate the perceived relative efficiency advantage of private schooling, which we find to be about 30% at the margin.

A school voucher would decrease property values in neighborhoods with good public schools and increase property values in neighborhoods with inferior public schools. These potential gains and losses may influence voting on voucher initiatives, particularly for homeowners without school children. This paper examines that possibility, using a survey of potential voters on California's 2000 voucher initiative. We find evidence that homeowners voted to protect their property values. For homeowners without school children, the probability of voting for the voucher was 39 percent if they lived in neighborhoods with good public schools and 56 percent if they lived in neighborhoods with inferior schools.

Statewide voucher plans are consistently rejected in plebiscites. This article explains voters’ attachment to public education despite the schools’ deficiencies: The public benefit of local schools accrues to parents, not children. Having children in a local school enables adults to get to know other adults better, which in turn reduces the transaction costs of citizen provision of true local public goods. This network of adult acquaintances within the municipality is “community-specific social capital.” Vouchers would disperse students from their communities and thereby reduce the communal capital of residents. Voters' implicit understanding of this causes them to reject large-scale voucher plans.

This paper discusses the legal implications of Zelman v. Simmons-Harris, the Supreme Court ruling on education vouchers. With a ruling in favor, the green light is now on for the development of voucher programs elsewhere. But, the green light shines only from the perspective of the federal constitution. The Supreme Court’s decision does not abrogate the application of restrictive provisions in state constitutions to publicly funded voucher and tax benefit programs, nor does it restrict a state from imposing reasonable regulations on participating private schools. As argued here, these state constitutions need to be carefully understood before anticipating more education voucher programs. As a comparison, the legal status of tuition tax credits is also considered. These credits appear to have the edge over vouchers in several key respects.

In this note, we review the Supreme Court opinion of June 2002 in Zelman et al. v. Simmons-Harris et al., 00-1751). In the first section, we offer an interpretation of the ruling in terms of four evaluative criteria: freedom of choice, productive efficiency, equity, and social cohesion. Unsurprisingly, the opinion strongly emphasized parental freedom of choice over the other criteria. In the second section, we consider whether the Supreme Court ruling represents a major victory for voucher advocates and whether it will have a substantial impact in improving America's schools. Our discussion takes a rather skeptical position, and we offer eight justifications for such a view.