School Voucher System Analysis

Recently, attention has been given to plans for improving the public schools by allowing parents to choose where their children attend school through a school voucher system. The education voucher system exists when a government provides payment to families that allow their children to attend a private or public school of their choice. The payment is in the form of a voucher that can be given directly to the parents of the child, or indirectly to the school of choice. The purpose of the voucher systems is “to increase parental choice, promote competition and allow lower income families access to private education” (West 1997, p.83). The implementation of the voucher system would force poorly run schools and inadequate teachers to improve their
Many believe that education reflects benefits onto society where others believe that these ‘benefits’ are not externalities and do not warrant government interference. Hall addressed that many in favor of government involvement in education argue that ensuring every child receives the minimum amount of education is necessary to promote a stable, and democratic society (2006, p.166). Friedman, originally in favor of this idea and later opposed, argued that a stable and democratic society is impossible without a minimum degree of literacy and knowledge on the part of most citizens (1962, p.86). A minimum amount of education does serve a purpose in society, but it does not have an effect on democracy. Lott showed empirical and theoretical evidence supporting the lack of effect education has on society. Lott’s proposition explained that education may provide stability, but it is not necessarily beneficial to democracy (1987, 1999). Another argument on education having beneficial externalities is the correlation between level of education and productivity of the individual and their coworkers. Hanushek explained that expanded education of an individual might indeed affect other workers in the economy and the new advancements in technology made by the educated population will lead to a spill over effect (2002, p. 2065). Although this idea may hold some truth, the effects of the spill over are not adequately reflected into the market. Hall insists that even if more educated workers creates a higher level of investment by firms leading to higher wages, the workers are still being paid for the marginal product of their labor (2006, p.169). It is also argued that an increase in education will have a positive effect on income. One would think that people with a higher level of education would have a higher income, but this assumption is false. Pritchett explained that