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Responses of Private and Public Schools to Voucher Funding: The Czech and Hungarian Experience

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  • Randall K. Filer
  • Daniel M??nich

Abstract

A state monopoly in schooling followed the collapse of communism in Central Europe. The centrally planned system was abandoned. Systems comparable with educational voucher scheme, also known as school choice system, were introduced in the Czech Republic and Hungary in the early 1990s. The newly established system of school financing allocates public funds according to the number of students enrolled in a school. Accredited non-state schools, private and religious, are also eligible for public subsidies. The scope and the form of these reforms represent a unique opportunity to test conflicting hypotheses of proponents and opponents of the voucher scheme. In this empirical analysis, we test fundamental theoretical predictions of the voucher model. Specifically, we test: i) whether non-state schools are established at locations where the supply of educational opportunities provided by state schools is low or of low quality, ii) whether state and non-state schools in such a system respond to changes in demand for education, and iii) whether state schools respond to competition from non-state schools. We use detailed school level data on the whole population of schools and data on regional conditions. In our econometric model we estimate education value added, instead of relying on absolute quality of school graduates. We find that non-state schools emerge at locations with excess demand and lower quality state schools. We also find that greater competition from non-state schools creates incentives for state schools with the result that state schools slightly improve the quality of educational inputs used and significantly improve their output, quality of graduates. As concerns the technical schools, we find that non-state schools react to regional labor market conditions in terms of technical branch premium and unemployment rate. We do not find such reactions to market signals by state schools. We introduce this analysis with a review of non-state schools' development in the Czech Republic and Hungary during the 1990s.

Suggested Citation

  • Randall K. Filer & Daniel M??nich, 2000. "Responses of Private and Public Schools to Voucher Funding: The Czech and Hungarian Experience," William Davidson Institute Working Papers Series 360, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2000-360
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    References listed on IDEAS

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    5. Filer, Randall K. & Jurajda, Stepan & Planovsky, Jan, 1999. "Education and wages in the Czech and Slovak Republics during transition," Labour Economics, Elsevier, vol. 6(4), pages 581-593, November.
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    Cited by:

    1. Ammermuller, Andreas & Heijke, Hans & Wo[ss]mann, Ludger, 2005. "Schooling quality in Eastern Europe: Educational production during transition," Economics of Education Review, Elsevier, vol. 24(5), pages 579-599, October.
    2. Ludger Wößmann, 2006. "Bildungspolitische Lehren aus den internationalen Schülertests: Wettbewerb, Autonomie und externe Leistungsüberprüfung," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(3), pages 417-444, August.
    3. Randall K. Filer & Jan Hanousek, 2002. "Data Watch: Research Data from Transition Economies," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 225-240, Winter.
    4. Lant Pritchett & Martina Viarengo, 2015. "The State, Socialisation, and Private Schooling: When Will Governments Support Alternative Producers?," Journal of Development Studies, Taylor & Francis Journals, vol. 51(7), pages 784-807, July.
    5. Karolina Goraus & Joanna Tyrowicz & Lucas van der Velde, 2017. "How (Not) to make women work?," GRAPE Working Papers 1, GRAPE Group for Research in Applied Economics.
    6. Ammermuller, Andreas & Heijke, Hans & Wo[ss]mann, Ludger, 2005. "Schooling quality in Eastern Europe: Educational production during transition," Economics of Education Review, Elsevier, vol. 24(5), pages 579-599, October.
    7. Ludger Wößmann, 2008. "Efficiency and equity of European education and training policies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(2), pages 199-230, April.
    8. Clive Belfield, 2003. "Political Preferences And The Privatization Of Education: Evidence From The UK," Education Economics, Taylor & Francis Journals, vol. 11(2), pages 155-168.
    9. Francisco Gallego, 2002. "Competencia y Resultados Educativos: Teoría y Evidencia para Chile," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 39(118), pages 309-352.
    10. Jurajda, Stepán & Münich, Daniel, 2010. "Admission to selective schools, alphabetically," Economics of Education Review, Elsevier, vol. 29(6), pages 1100-1109, December.
    11. Herrera Gómez, Marcos, 2006. "Efecto de la Competencia de la Educación Privada sobre la Calidad de la Educación Pública [Effect of Private Education Competition on the Quality of Public Education]," MPRA Paper 30772, University Library of Munich, Germany.
    12. Münich, Daniel & Jurajda, Štěpán, 2008. "Gender Gap in Performance under Competitive Pressure," CEPR Discussion Papers 7059, C.E.P.R. Discussion Papers.
    13. Harry Anthony Patrinos & Felipe Barrera-Osorio & Juliana Guaqueta, 2009. "The Role and Impact of Public-Private Partnerships in Education," World Bank Publications - Books, The World Bank Group, number 2612, December.

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    More about this item

    Keywords

    Educational finance; government expenditures and education; occupational choice; labor productivity;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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