The Prospects for Education Vouchers after the
Supreme Court Ruling. ERIC Digest.
by Belfield, Clive
In June 2002, newspapers were full of headlines about how the U.S. Supreme
Court had approved vouchers for America's schools. In fact, the Supreme
Court had only considered the legal status of a small voucher program in
Ohio, the Cleveland Scholarship and Tutoring Program. It ruled that the
program does not offend the Establishment (of religion) Clause of the U.S.
Constitution--even though over 90 percent of the voucher students attended
religious schools. The majority opinion was premised primarily on the need
to expand school "choice" and the fact that the Cleveland program "is a
program of true private choice... neutral in all respects toward religion.
It is part of a general and multifaceted undertaking by the State of Ohio
to provide educational opportunities to the children of a failed school
district" (see Zelman v. Simmons-Harris). Fundamental to public schooling--the
Supreme Court decided--should be the right to choose which school to attend.
To some commentators, this ruling is "as historic" as the 1954 ruling
in Brown vs. Board of Education. It has certainly spurred pro-voucher advocates
to launch legal challenges in several other states, including Maine and
Washington, with the longer term goal of extending voucher programs across
the country. This digest examines the prospects for voucher reforms across
the U.S. education system.
THE IMPORTANCE OF VOUCHERS IN THE U.S. EDUCATION SYSTEM
Currently, fewer than 20,000 American students use publicly-funded school
vouchers in Milwaukee, Cleveland, and Florida. As a proportion, this figure
is tiny, even when compared to the numbers of students attending private
schools (5.3 million), enrolled in charter schools (0.6 million), or being
home-schooled (0.8 million) (Bauman, 2002; U.S. Department of Education,
Education voucher programs are neither prominent nor popular now, but
the future may be different. Whether the programs proliferate over the
next decade will depend on three key issues: the legal framework for vouchers,
the extent of the demand for them, and the sufficiency of the supply of
schools accepting voucher funds.
THE LEGAL FRAMEWORK FOR VOUCHERS
Even though one voucher program has been given the go-ahead by the U.S.
Supreme Court, it is not assured that all programs will be supported by
courts. The law only declares what is permissible; it does not say what
is desirable. In the Cleveland case, vouchers were appraised in light of
the many schooling options available there, such as magnet and community
schools, and the acknowledged educational failures in the Cleveland School
District. Such conditions do not exist in all states, or across all districts.
The ruling also does not override state proscriptions on funding to private
or religious schools. In fact, only 19 states have constitutions that would
follow the Supreme Court ruling; another 15 have constitutions that place
heavy restrictions on voucher programs, and the remaining states could
go either way (Kemerer, 2002).
Generally, the power of court rulings to effect any change has been
regarded skeptically: in this case, the courts are not compelling reform,
nor are they suggesting a way to finance it. Overall, the U.S. Supreme
Court decision in Summer 2002 does encourage vouchers, but there will be
further legal challenges to statewide voucher programs.
THE DEMAND FOR EDUCATION VOUCHERS
Two primary benefits of education vouchers are expected: more freedom
of choice and more efficient and effective schools (Gill, Timpane, Ross,
& Brewer, 2001). Freedom of choice is enhanced because students need
no longer attend their neighborhood school. The efficiency gains from introducing
vouchers have four sources: higher achievement scores for voucher students,
competitive pressures between schools for voucher funds, more efficient
schools, and faster rates of school innovation in response to parental
Three main groups might have a stake in education vouchers:
* Parents. There is reasonably strong evidence that vouchers promote
greater school choice, and so make some parents more satisfied with their
children's schools, particularly if the previous options were failing or
low-performing schools (Peterson & Hassel, 1998). Indeed, voucher programs
can now be seen as redistributive: they help families who are least well-served
under the current education system (Howell & Peterson, 2002).
But many parents already face a reasonably large choice set--as high
as 70 percent of parents have choice (Hoxby, 2001)--and can exercise choice
across many dimensions (inter-district, intra-district, intra-school, and
inter-sector). Many parents are reasonably happy with their current public
school (Moe, 2001). Parents may be risk-averse in changing from "standard"
public schooling to "unknown" private schooling, where the variance in
quality may be wider. Perhaps as a reflection, the utilization rates for
vouchers are fairly low. In the Dayton, Washington, DC, and New York experiments,
20-35 percent of low-income voucher recipients awarded a three-year voucher
of between $1,400-$1,700 failed to use it at all (Howell & Peterson,
2002). Of 15,000 available vouchers in Milwaukee, only about 9,000 have
been taken after years of publicity and expansion of supply. Thus, benefits
would be limited to the additional choice options that would be made available
and families do actually select.
* Tax-Payers. If the efficiency gains from vouchers are sizeable, tax-payers
would be expected to lobby for political change to encourage their use.
However, efficiency gains from voucher programs appear modest. Voucher
programs yield only small positive achievement gains for participating
students (Howell & Peterson, 2002). The pressures from competition
between schools induce some efficiency gains, but again the effects are
modest (Belfield & Levin, 2002). Alternatives to the traditional public
school--i.e., charter, for-profit, and private schools--do not show clearly
either greater effectiveness or greater cost effectiveness. Charter schools,
even where regulation is lighter, are no more efficient than traditional
public schools (Miron & Nelson, 2002). For-profit schools often face
financial difficulties, particularly with high marketing costs and difficulties
in establishing brand loyalty. The evidence on private schools suggests
that they serve to raise attainment (the amount of schooling) by modest
amounts, but have little effect on test scores. Even where these schools
show modest improvements over public schools in effectiveness (e.g., test
scores), there is no clear evidence of greater efficiency (e.g., test scores
per dollar). Finally, vouchers may promote innovation or invention or encourage
the diffusion of best-practice management, but the evidence of this is
not widespread. Critically, any efficiency gains must be set against the
adjustment costs needed to finance and administer a large voucher program
(see Levin & Driver, 1997).
* Homeowners. Education is funded in large part through local property
taxes, and school enrollments are determined by residence. Property prices
reflect the quality of local schools, so parents who want good schools
have to pay a high price for their homes. Education vouchers might break
the link between school enrollment and place of residence, thereby reducing
the value of houses in high-quality school districts. Many homeowners in
these areas might therefore see the value of their property fall. If this
were to happen, they might be strongly averse to the introduction of education
SUPPLY OF SCHOOLS WILLING TO ACCEPT VOUCHER STUDENTS
If the voucher is set at a high value, then a sufficient supply of private
schools will be forthcoming. However, if the voucher is set significantly
below the average per pupil expenditure of public schools, then it is reasonable
to predict that private schools will not be overly enthusiastic about vouchers.
For vouchers to create more choices and promote efficiency, there would
need to be a large supply of private schools ready to accept them. Several
factors will influence private school decisions. One is the amount of surplus
capacity in private schools, although evidence suggests that economies
of scale are exhausted at relatively small school sizes (Andrews, Duncombe,
& Yinger, 2002). Another is whether existing schools can expand to
serve new groups of students. But such an expansion may be limited for
religious schools, if they are sensitive about enrolling students who are
imperfectly devout. Similarly, independent schools may be sensitive to
the potential or perceived loss of selectivity from enrolling voucher students.
Perhaps most importantly, however, private schools may be cautious about
taking government funds in the form of vouchers, which could be accompanied
by increased government regulation and oversight. In law if not in practice,
the government has substantial discretion over how private schools are
run, and this law is likely to encroach further if private schools accept
voucher-funded students. Survey evidence shows more than half of all private
schools are likely to refuse to accept voucher students under such regulation
(Muraskin & Stullich, 1998).
In emphasizing freedom of choice, the Supreme Court has clearly given
support to reforms involving education vouchers. At issue is whether this
support means that the prospects for education vouchers are bright. Undoubtedly,
the ruling will please voucher advocates. It stresses the advantages of
choice over possible losses in social cohesion from entanglement between
religion and government. It also corresponds well with advocates' new,
focused agenda: voucher programs for low-income families in inner cities.
And, it clarifies a debate where beforehand uncertainty had scared away
supporters. At issue for the future is whether these factors--when set
in the context of legal constraints, public support or opposition, and
private school buy-in--are sufficient to tip the balance in favor of more
Andrews, M., Duncombe, W., & Yinger, J. (2002, June). Revisiting
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