Neal, D., (2002)

‘‘How vouchers could change the market for education.’

Journal of Economic Perspectives 16: 4, pp. 25-44

• A summary of both empirical and theoretical literature relating to voucher schemes.
• Neal emphasises that changes in the labour market for teachers could be an important benefit of vouchers. The personnel systems of many public schools are bureaucratic & rigid, while charter & private schools tend to deviate from these systems.
• Three studies have also found that teachers with higher test scores and better college records leave their jobs at higher rates.
• Neal notes that a market is more likely than a mechanical accountability system to reward schools able to teach children hard-to-quantify but highly valued (by parents) skills such as intellectual curiosity, critical thinking, and self-confidence.
• On the question of sorting/cream-skimming, Neal notes that there have not been enough large-scale voucher programs to enable definitive empirical answers, so for now we must turn to the general equilibrium model results of authors such as Nechyba, Epple and Romano.
• The key point Neal draws from these papers is that it is not helpful to ask how vouchers per se would affect the sorting of students among schools. Voucher plans that differ with respect to funding, targeting or admissions regulations may yield entirely different outcomes.
• From Nechyba’s numerous simulations, one result is almost ubiquitous – wealthy families in the best public school districts usually lose from the introduction of vouchers. This may help explain why suburban residents have voted against vouchers in state ballot initiatives.
• Epple & Romano have shown that it is possible (if vouchers cannot be ‘topped up’ by parents and voucher levels vary with student ability) to design voucher systems which do not
  increase stratification by ability – though this may not be possible to implement in practice.