‘School Vouchers: A Survey of the Economics Literature’

The merits, or otherwise, of school voucher programmes have been the subject of (often heated) debate for many years. The issues are complex, and comprehensive, balanced and fair appraisals of the evidence of their effectiveness, potential adverse effects, and trade-offs, are rare. In what is a substantial survey of the literature, taking in the full range of theoretical, computational, and empirical research on voucher measures, Dennis Epple, Richard E. Romano, and Miguel Urquiola make a sensible case for continued exploration without ignoring the many rigorous studies that have found effects of vouchers on educational outcomes to be insignificant, or the challenges of designing programmes to limit or counteract the adverse effects of sorting.

Beginning with an overview of theoretical arguments for and against vouchers, the authors show how the limited nature of many targeted reform measures means that little headway has been made research-wise in resolving key areas of debate. The debate tends to assume universal availability, whereas the evidence is largely from small-scale programmes. Small-scale, targeted programmes are less likely to produce any sorting effect, so evaluation is correspondingly less likely to address concerns about stratification. In the same way, measures that do not stimulate extensive new supply are unlikely to result in much curricular variety. Evaluation is therefore not going to yield insight into potential gains from choice effects – that is, whether finding the right learning environment for the child is as important for outcomes as proponents of school choice suggest.

This doesn’t mean targeted measures don’t have value. Indeed, empirical evidence to the effect that in some settings, or for some subgroups or specific outcomes, vouchers can have a substantial positive effect, informs an overall optimism about targeted measures. The authors suggest that we may need a different frame of reference when it comes to evaluating their effects.

Attention to context, and the specific characteristics of the programmes being evaluated, is shown as crucial to improving the design of future measures. With reference to characteristics of established programmes in eight different countries, the authors’ commentary on the empirical research undertaken to date shows how eligibility criteria, how vouchers are funded, and the criteria for private school participation, are all key considerations for evaluation.

The case for continued exploration rests on several grounds. While most studies have found learning gains to be insignificant, vouchers are very rarely associated with negative effects for pupils, and in some cases can have significant positive effects. By isolating the conditions under which voucher programmes are most likely to be successful in inducing gains through greater competition, and attending to the circumstances in which sorting is most likely to undermine effectiveness, we can design for improved functioning.

Given the authors’ emphasis on the consensus that some sorting is inevitable, this optimism is especially encouraging – and all the more so given the limited consideration given to the potential of a ‘positively discriminating’, means-tested voucher to compensate for cream-skimming and incentivise efforts towards raising attainment among disadvantaged pupils. (The literature on England’s ‘quasi-voucher’ system is not included in the survey.) This would seem an especially promising avenue for both research and policy, albeit one that may involve trade-offs in respect of the savings to public education generally expected of voucher programmes.

James Croft is Executive Director of the Centre for the Study of Market Reform of Education (CMRE) and the author and co-author of several of its reports, including Collaborative overreach: why collaboration probably isn’t key to the next phase of school reform (2015).

This comment piece originally appeared in the CMRE Annual Research Digest 2015. The piece reviews a paper by Dennis Epple, Richard E. Romano, and Miguel Urquiola, ‘School Vouchers: A Survey of the Economics Literature’, which was published in September 2015 as an NBER Working Paper (No. 21523). This working paper version may be downloaded free here.

CMRE also produce a Monthly Research Digest, edited by our Research Director, Gabriel Heller Sahlgren. You can download back copies of the digest here.