Fernàndez, R. & Rogerson, R., (2003)

‘School Vouchers as a Redistributive Device:
An Analysis of Three Alternative Systems’

in Hoxby, C. (ed.), The Economics of School Choice, University of Chicago Press

• Models the effect of vouchers on inequality and welfare when production of education is assumed to be perfectly efficient – thus abstracting from the debate about how schools respond to competition.
• The model is purely one of parents allocating resources to education. Questions of heterogeneous neighbourhoods/schools are ignored for simplicity.
• Vouchers are found to generate increases in education spending relative to total income. This effect is driven mostly by those with the lowest incomes spending more on education as voucher size increases.
• Examining the effect on welfare (using a utilitarian welfare function) the authors find that for all voucher programs and all voucher sizes considered, welfare gains are positive.