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Economic Modeling and Analysis of Educational Vouchers


  • Dennis Epple

    () ( Tepper School of Business, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213
    National Bureau of Economic Research, Cambridge, Massachusetts 02138)

  • Richard Romano

    () ( Department of Economics, University of Florida, Gainesville, Florida 32611)


The analysis of educational vouchers has evolved from market-based analogies to models that incorporate distinctive features of the educational environment. These distinctive features include peer effects, scope for private school pricing and admissions based on student characteristics, the linkage of household residential and school choices in multidistrict settings, the potential for rent seeking in public and private schools, the role of school reputations, incentives for student effort, and the intergenerational dynamics of human capital accumulation. Research has also elucidated features of voucher design, including income and ability targeting, restrictions on private school pricing and admissions, and the potential for garnering political support. We review these research advances.

Suggested Citation

  • Dennis Epple & Richard Romano, 2012. "Economic Modeling and Analysis of Educational Vouchers," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 159-183, July.
  • Handle: RePEc:anr:reveco:v:4:y:2012:p:159-183

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    Cited by:

    1. Epple, Dennis & Romano, Richard, 2014. "On the political economy of educational vouchers," Journal of Public Economics, Elsevier, vol. 120(C), pages 62-73.
    2. Hinnerich, Björn Tyrefors & Vlachos, Jonas, 2017. "The impact of upper-secondary voucher school attendance on student achievement. Swedish evidence using external and internal evaluations," Labour Economics, Elsevier, vol. 47(C), pages 1-14.
    3. Burgess, Simon, 2016. "Human Capital and Education: The State of the Art in the Economics of Education," IZA Discussion Papers 9885, Institute for the Study of Labor (IZA).
    4. Nicolás Grau, 2016. "A Dynamic Model of Elementary School Choice," Working Papers wp417, University of Chile, Department of Economics.
    5. Akyol, Metin, 2016. "Do educational vouchers reduce inequality and inefficiency in education?," Economics of Education Review, Elsevier, vol. 55(C), pages 149-167.

    More about this item


    cream skimming; education policy; peer effects; school choice; school competition;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy


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