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Education Vouchers, Dropouts, and the Peer Group Problem 1

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Abstract

In a series of recent papers, education economists such as Charles Manski (1992), Dennis Epple and Richard Romano (1998a, 1998b) and Thomas Nechyba (1999) have emphasized the presence of one particular educational spillover in the use of school vouchers – the “peer group” problem. This is an external effect that vouchers may have on the pool of students remaining in the public school system. By allowing low income students of high aptitude and ability to leave the public school system, a voucher system will encourage for-profit private schools to “skim the cream off” the public school system and so depreciate the average quality of students remaining behind. Because the quality of education received by students is in part a function of the average quality of their classmates, the loss of higher ability students reduces the quality of education received by those remaining. Hence a voucher system, it is argued, will promote inequity across students even as it improves the overall efficiency of the educational system.

Suggested Citation

  • J. Stephen Ferris & Edwin G. West, 2000. "Education Vouchers, Dropouts, and the Peer Group Problem 1," Carleton Economic Papers 00-05, Carleton University, Department of Economics, revised Apr 2002.
    • Handle: RePEc:car:carecp:00-05
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    File URL: http://www.carleton.ca/economics/research/working-papers/carleton-economic-papers-cep-1991-2000/
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    Citations

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    Cited by:

    1. Ambrose Leung, 2004. "Delinquency, schooling, and work: time allocation decision of youth," Applied Economics, Taylor & Francis Journals, vol. 36(9), pages 987-993.
    2. Leung, Ambrose & Ferris, J. Stephen, 2008. "School size and youth violence," Journal of Economic Behavior & Organization, Elsevier, vol. 65(2), pages 318-333, February.
    3. Christopher C. Klein, 2007. "Efficiency versus Effectiveness: Interpreting Education Production Studies," Working Papers 200703, Middle Tennessee State University, Department of Economics and Finance.
    4. Billger, Sherrilyn M., 2007. "Principal Accountability at Private Secondary Schools," IZA Discussion Papers 3162, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    economics of education; education vouchers; school dropouts; peer group effects; education externalities;
    All these keywords.

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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