Reply #17: Doing this thread helped. My urge to do violence is waning a bit. [View All]

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http://econlog.econlib.org/archives/2003/10/adverse_results.html


Adverse Results for School Vouchers
Arnold Kling

Chang-Tai Hsieh and Miguel Urguiola find evidence that in Chile school vouchers caused schools to compete for the best students rather than compete to deliver better education.


Although statistically insignificant, the point estimates suggest that, if anything, test scores experienced a relative decline in communities where the private sector made greater inroads.


The results of this study would appear to me to suggest that vouchers need to be "progressive," in that higher vouchers should be given to needier students. Progressive vouchers would change the incentives so that schools would compete for needier students, which in turn might create more incentive to compete on quality.

It could be that the majority of early experiments with vouchers are likely to prove disappointing. However, if we learn from successful and unsuccessful experiments and adopt best practices, my guess is that ultimately education systems that adopt vouchers will be superior.

UPDATE: More from Tyler Cowen and from Brad DeLong.

For Discussion. In the Chilean system, poorly-performing public schools were not shut down. How could this explain the authors' results that areas where private schools made larger inroads were not areas in which overall education outcomes improved?

The Capitalists account for this failure thusly:



Will Chile's President Flunk the Test?
by Mary Anastasia O'Grady

http://www.hacer.org/current/Chile27.php

In 1982, Chile introduced a voucher system that allows children to use government funds to attend either public or private schools. The voucher system seeks to improve the quality of education by creating competition for students. Among private-school students, it has worked; test scores are up. But public schools remain disappointing.

The problem is that rather than a full-fledged voucher system, Chile has a quasi-voucher program that distorts the choice and competition effects of vouchers by subsidizing public schools directly. The rationale for the subsidy is fine: Since the cost of educating a poor child is higher than a middle-class child, extra funding is needed to support poor children. But unfortunately, that extra funding does not go into the hands of the student as a tool for choice. Instead, it goes directly to the public schools that the poor children attend. If a poor student wants to go to a private school, he cannot take the subsidy with him.

Claudio Sapelli, a Chicago-trained economist at the Catholic University in Santiago, has studied the distortions of the quasi-voucher system and written a chapter in the book "What America Can Learn From School Choice In Other Countries," (Cato Institute, 2005). On the subject of the "non-portable" funding, he wrote, "schools receive it in the form of supply subsidies, which merely accentuates the dependence of poor students on public schools." In other words, in the absence of making the subsidy portable, neither choice nor competition have had a chance to emerge.

The trouble for Chilean politicians is that the government bureaucracy and teachers' unions are powerful special interests. So although a more competitive system is needed, the incentive to feed the monster bureaucracy may be greater.

That damn teachers' union. Eventually we're just going to have to flush that. It just gets in the way no matter how you try to accommodate it in the "free market". So let's just unhook all that lovely money from the federal honeypot and let the teachers swing in the breeze.