Arnold Kling  

Two-Handed on Vouchers

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Labor Market Puzzle... Politics vs. Economics, II...

What would a new economics blog be without "on the one hand...on the other"? Marginal Revolution's Tyler Cowen writes,


If we are going to move forward with vouchers, I would like to know what the plan will look like, once it gets through the political meatgrinder. I don't know any voucher proponent who has done this.

Marginal Revolution's other hand, Alex Tabarrok, writes,

I see no reason why private schools under a voucher system could not be regulated as private schools are today. Private schools do face some minimal regulations including hours and some content requirements but I don't think these have been a significant constraint. Some private schools will undoubtedly teach nonsense but Tyler seems to forget that Ebonics, to give just one example, was a creature of the public schools not the private schools.

Of course, I would say that no voucher plan can work unless schools teach Mandatory Libertarianism.

For Discussion. Economists pride themselves on trying to anticipate the secondary consequences of policy. What are some of the secondary consequences of vouchers that ought to be considered?


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COMMENTS (23 to date)
Kyle Markley writes:

I can't answer without knowing... would private schools accepting vouchers be subject to the same federal education standards that public schools are? I find it difficult to believe politicians wouldn't use that money as a stick to make the private schools behave more like public schools.

http://www.sepschool.org/misc/vouchers.html

Matt Young writes:

The most prominent secondary effect will be the effect of philanthropism as industrialists compete to prove the nurture over nature debate. This philantrophy competition will put the most hopeless kids into the most intense private schools. Just watch Bill Gates go wild.

We will see military middle schools, scientific specialty schools, literature, and music. Most interestingly, these private schools, free of racial restrictions will go out of their way to implement affirmative action.

The second effect we will see is high school trade education that is taylored to meet local industry and business requirements. Schools that can get students into reasonable jobs at graduation will be very popular. Look for auto mechanics, computer skills, restaurant management, secraterial, and electronic tech to become very popular with inner city kids. I could see local factories design special courses, perhaps on site, designed to get new workers up and running immediately.

And finally, don't forget young kids in the juvenile jail system and the child care system. With money freed up to run well managed schools in the system, the punitive effects of these places will diminish.

And, community colleges will get into the act. Already in California, community colleges compete with grammar and high school for special summer and afternoon programs. If community colleges work with private schools going after voucher money, the public schools will be in real trouble.

But overall, the greatest effect, like I say, will come from private scholarships supplementing the voucher. The increase in money from this system is such that current teachers who oppose it must have been tought economics at a publicly funded college.

John Thacker writes:

First off, in school districts where there is a large private and parochial school presence already, that presence mostly likely causes lower tax spending on schools. Those who do, did, and plan to send their children to private and parochial schools would be more likely to oppose school bond issues and tax outlays. (If there is a correlation between spending and performance, this would tend to weaken the public school system, and reinforce the strength of the private system.)

One can assume a reverse relationship where the private school system is weak. For example, not only may higher outlays make a public school system more attractive to parents, but the higher taxes paid towards the public school system will, at the margin, cause fewer families to pay for private tuition.

The adoption of vouchers could have a strong effect in those areas which already have a large parochial and private school presence. Parents who use the private system would then also benefit from increased educational taxes, since the voucher amount would likely be linked somehow to the expenditure in the public system.

Expectation: Educational spending to increase in areas which currently have a strong private school presence.

Ramifications: Not necessarily negative. Perhaps it would make more sense for more people in the community to have a stake in school spending.

John Thacker writes:

From below: "what families spend a lot more on, the authors calculate, is a house in a safe neighborhood with a good school — about 70 percent more a year, discounted for inflation, for the typical family of four. The scarcity of good schooling has created a bidding war that drives up house prices in first-rate school districts."

This points up another secondary consequence. Vouchers, depending on implementation, should decrease the strength of the link between housing and good schooling, since schooling would be less determined by where one lived. One would then expect the price of housing located in good school districts to fall relative to housing in less good school districts. This could have interesting and far-reaching effects. (Among other things, the price of urban housing might rise, and urban living become slightly more attractive.)

Eric Krieg writes:

City Jounral is the bible of school choice, and Sol Stern is the high priest.

http://www.nationalreview.com/interrogatory/interrogatory090803.asp

Boonton writes:

My guess? After issuing a voucher for $4000 per kid, nearly all non-Catholic private schools will raise their tuition by $4000. To put it bluntly, the 'quality education' of many private schools consists on keeping people out as much as what actually happens in the classroom. Econ 101 at Yale is not that different than at Rutgers University. Yale's value comes from keeping 99.9% of the population *out*!

Look for management of the school system to become more centralized. Public schools are logically governed at the local level. Vouchers would make that very awkward so control would move away from local communities & towards state & Federal gov't. In fact, it would probably end locally based education entirely....vouchers would end up being managed by the Federal Gov't...joining Social Security, Medicare etc.

Along with this look for a lot of values disputes. Ebonics & Heather has Two Mommies did appear in the public school system but they were quickly killed there as well. I suspect we would see a lot of disputes along the lines that the National Endowment for the Arts suffered 10 or so years ago. Politicians will try to keep radical schools from groups like the Nation of Islam from getting vouchers...they will most likely fight back in the courts....

Just my two cents of what to expect...

One argument that the anti-voucher camp raises:

"A voucher only gives you $3K per year, while the tuition in a private school is $10K per year. In other words, except for the affluent (whose children are likely going to private school anyway), vouchers don't really help the rest of the population."

How credible is this argument?

Since I did my entire schooling outside the US, (came here for grad school), my knowledge base is pretty limited. Can someone help me out?

Boonton writes:

If vouchers are instituted on a wide scale the $3k would probably help middle and lower-middle income parents who are on the border of sending their kids to private school or public school.

A large scale voucher proposal would be accompanied with dramatic increases in the price of private schooling. Over the long run this would taper out a bit as new capacity was brought online to service the market. A very limited voucher program, ironically, might work much better since it would provide at least a few options for kids in the worst districts... Sadly the worst of the worst districts are so bad it difficult to argue against any policy because one would find it hard to show how things could get any worse.

Eric Krieg writes:

Prashant, my parish school (K-8) costs less than $3000.

The local Catholic High School is more expensive, like $5k and change. But like most suburban Catholic high schools in America, it is very prestigious, with lots of heavy hitting alumni like Congressmen and such.

In another words, its worth the extra dough!

Eric Krieg writes:

I agree with Boonton about tuition if vouchers are implemented on a wide scale. It would increase, just as it does at private colleges. And the government regulation would be similar to that of private colleges, which means that it would be burdonsome and costly.

I'm a realist when it comes to vouchers. I want to see them implemented in the worst school districts with the highest minority enrollments. Get the most bang for the buck as quickly as possible.

Arnold Kling writes:

"A voucher only gives you $3K per year, while the tuition in a private school is $10K per year. In other words, except for the affluent (whose children are likely going to private school anyway), vouchers don't really help the rest of the population."

Prashant, Marie Gryphon from Cato answered that question (Prashant and I went to a debate on the subject). She said that we should allow voucher opponents to choose the level of the voucher. If the opponents say that it takes $15,000 a year to send a child to a good school, then so be it.

The voucher opponents are so convinced that vouchers are a plot to cut spending on schools that they cannot cope with this concept. They cannot imagine any voucher larger than $3000, even as they cry out for more spending in public schools, which in our area already spend more than $10,000 per pupil.

Boonton writes:

It is interesting, though, that most voucher proposals are for $3000 or less...even though the districts they are being tried out in supposedly are spending $10K or more per student.

If the math was as simple as both sides stated, one would think that each student taking the voucher option would indirectly be providing the school with an additional $7K of funds for the remaining students.

Eric Krieg writes:

>>If the math was as simple as both sides stated, one would think that each student taking the voucher option would indirectly be providing the school with an additional $7K of funds for the remaining students.

Simple answer. Average spending is set at the margins. In another words, the special ed kids who are getting $100k per year are jacking up the average rate. The mainstream kids are getting nowhere near $10k spent on their education.

It's an accounting fiction, in another words.

Boonton writes:

Then we should be clear what we are saying. If we are talking about a voucher for regular kids, where the school receiving it is not required to take special ed kids or other expensive caes, then we should not compare a $3K voucher to a $10K average.

If the voucher is meant to be for the easiest kids to educate, then we should estimate how much the public schools are spending on the easiest kids. If vouchers are meant to replace the public system then those receiving the vouchers should be required to take on *all* of the burdens of the public school system.

The 'cherry picking' argument is a valid one IMO. Vouchers would send the easiest kids (those with involved parents, those the private schools would accept) out of the system leaving behind the hardest cases. The natural result would be a rise in the avg. cost for the public schools which would naturally be used as political spin for showing how successful the program was working.

During the 2000 campaign I remember reading that Bush was able to produce his 'success' in education by simply classifying non-English speaking kids outside of the 'average student'. Not surprisingly he could then the cite dramatic improvement in English scores.

Eric Krieg writes:

Boonton, I don't disagree that, to some extent, there is a danger that vouchers will cherry pick the "good" students.

I just don't care.

Look, the choice is for a certain group of kids (the "good" ones) to be educated or not. If they go to public schools, they won't be educated. If they go to private schools, they will be.

It's educational triage. You only do triage when you are desperate. And in inner cities, the schools are desperate.

I read in the Tribune today that a suburban school district bordering Chicago has been innundated with "homeless" students. What's happening is that parents desperate to get their kids into good schools have figured out that districts are mandated by law to accept homeless students. So the parents lie, and say that they are homeless (while really living in Chicago), in order to get their kids accepted to these (marginally better, in my opinion) suburban schools.

I guess that when there is a will, there is a way.

Boonton writes:

"Look, the choice is for a certain group of kids (the "good" ones) to be educated or not. If they go to public schools, they won't be educated. If they go to private schools, they will be."

This maybe the choice in the worst school districts, it certainly does not appear to be the case for most districts. Most districts are pretty good all things considered.

I'll go along with vouchers as triage but I'd like agreement ahead of time that we are all aware what this is likely to do to the numbers. If you split a hospital in two and send all the cancer cases to one and all the plastic surgery to the other, you have to recognize that the cancer hospital hasn't gotten worse because their survivial rates have fallen since the time when they were combined.

Eric Krieg writes:

>>This maybe the choice in the worst school districts, it certainly does not appear to be the case for most districts. Most districts are pretty good all things considered.

You know, B, some people would say that this is a racist statement.

I could translate what you wrote above into, "All the white kids are learning. The black kids are the problem".

Well, that isn't good enough. We have a situation in this country where you can count the high performing minority students (as measured by, say, perfect SAT scores) on LITERALLY one hand. Probability alone tells you that there should be more high performing minority students than that.

The problem is that potentially high performing minority students are trapped in awful schools (I mean, what would it take for you to impersonate a homeless person?!?) We need to set these kids free, so that they can live up to their potential.

Eric Krieg writes:

>>I'll go along with vouchers as triage but I'd like agreement ahead of time that we are all aware what this is likely to do to the numbers.

I think that there is a logical and/ or economic fallacy here (maybe someone smarter than me, like Arnold, can better explain it). Vouchers aren't a zero sum game, even if the numbers aren't as attractive as the averages say they are.

Eric Krieg writes:

From Rod Page writing in National Review:

This important issue — school choice — really boils down to two questions. One, will it help our schools?; and two, is it the right thing to do? The answer to both questions is an overwhelming "yes."

If we want schools to change, to become more productive, to become more efficient and more effective, then we must promote and nurture school creativity and innovation. By shielding schools from market forces, we are preserving a status quo, which on the whole is mediocre at best. We need to do something radical to shake up the system.

The academic discipline of organizational effectiveness makes clear that creativity and innovation increase productivity and efficiency in organizations — this is as true of schools as it is of other organizations.

There is significant research about what can be done to advance improvement. After studying thousands of innovations in processes and products, James M. Utterback of the Massachusetts Institute of Technology concluded, "Market forces appear to be the primary influence on innovation." Utterback noted that 60 to 70 percent of important innovations have been in response to market forces.

We also know from opportunity-scholarship programs that have been instituted in Milwaukee, Cleveland, and Florida that school choice helps on two levels. First, it raises student achievement for those children who are fortunate enough to leave the poorly performing public schools. But, another interesting thing has happened in those cities: The competition has raised the performance of the public schools as well. I am heartened by the fact that some of the strongest advocates for school choice in Milwaukee are members of the public-school board itself.

Boonton writes:

>>This maybe the choice in the worst school districts, it certainly does not appear to be the case for most districts. Most districts are pretty good all things considered.

"You know, B, some people would say that this is a racist statement.
I could translate what you wrote above into, "All the white kids are learning. The black kids are the problem"."

Errrr, no you cannot translate that statement like that. You can translate that statement into 'most school districts are fine, the ones that are bad are really, really bad'.

Boonton writes:

Perhaps Erics passages really point to the optimal solution being one of vouchers as a 'punishment' for the worst public school districts. Just like a handful of executions may deter many crimes that would probably not end in a sentence of death, a handful of voucherized districts may shakes the rest of the system up just enough to improve things.

The fallacy of much of the rest of Eric's passages is that they start off with a bunch of things we would all like, more creative schools, more productive, more efficient, more innovative etc. Unless you are starting from the absolute bottom, though, you cannot guarantee that a radical reform may make things worse. Closing down 'innovative' local schools in favor of corporate 'McDonald's-like' schools, using grade inflation, cheating and other means to manufacture an image of a superior school (call it the Enron School) and a host of other problems.

The better something is running, the higher the burden on the person who says it needs to be fixed. While this may make the voucher case easy for the worst schools, it makes it harder for a universal voucher system which would be a very radical change.

Eric Krieg writes:

I'm perfectly willing to take an incremental approach (as are most conservatives, I believe). The poorest students going to the worst schools get the voucher.

The nature of America being what it is, these voucher students will tend to be minorities. I think a well planned voucher program along these lines will create a critical mass of minority students achieving at the highest levels. This in turn will aleviate the need for affirmative action at places like the Ivy League.

Matt Young writes:

John Thacker gets an A.

School vouchers will have the greatest impact on neighborhoods since busing.

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