On The Political Economy Of Educational Vouchers
Two significant challenges hamper analyses of the collective choice of educational vouchers. One is the multi-dimensional choice set arising from the interdependence of the voucher, public education spending, and taxation. Second, even absent a voucher, preferences over public spending are not single-peaked; a middling level of public school spending may be less attractive to a household than either high public school spending or private education coupled with low public spending. We show that Besley and Coate's (1997) representative democracy model provides a viable approach to overcome these hurdles. We provide a complete characterization of equilibria with an endogenous voucher. A voucher is adopted in political equilibrium provided the coefficient of variation of income is sufficiently small. We undertake a parallel quantitative analysis. We find that no voucher arises in equilibrium for the U.S. income distribution, which exhibits too much heterogeneity. For tighter income distributions, including those in Douglas County, Colorado (where a voucher was recently adopted) and in Denmark (which has a national voucher program) our model predicts a positive voucher. Public support for a not-too-large voucher arises because the cross subsidy to public school expenditure from those switching to private schools outweighs the subsidy to those who attend private school in the absence of a voucher.
|Date of creation:||Apr 2012|
|Date of revision:|
|Publication status:||published as Epple, Dennis & Romano, Richard, 2014. "On the political economy of educational vouchers," Journal of Public Economics, Elsevier, vol. 120(C), pages 62-73.|
|Note:||CH ED PE|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dennis Epple & Richard Romano, 2012. "Economic Modeling and Analysis of Educational Vouchers," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 159-183, 07.
- Rajashri Chakrabarti, 2007.
"Can increasing private school participation and monetary loss in a voucher program affect public school performance? Evidence from Milwaukee,"
300, Federal Reserve Bank of New York.
- Chakrabarti, Rajashri, 2008. "Can increasing private school participation and monetary loss in a voucher program affect public school performance? Evidence from Milwaukee," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1371-1393, June.
- Rajashri Chakrabarti, 2005. "Can Increasing Private School Participation and Monetary Loss in a Voucher Program Affect Public School Performance? Evidence from Milwaukee," Public Economics 0512003, EconWPA.
- Hoyt, William H. & Lee, Kangoh, 1998. "Educational vouchers, welfare effects, and voting," Journal of Public Economics, Elsevier, vol. 69(2), pages 211-228, June.
- Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
- Joseph G. Altonji & Ching-I Huang & Christopher R. Taber, 2015.
"Estimating the Cream Skimming Effect of School Choice,"
Journal of Political Economy,
University of Chicago Press, vol. 123(2), pages 266 - 324.
- Joseph G. Altonji & Ching-I Huang & Christopher R. Taber, 2010. "Estimating the Cream Skimming Effect of School Choice," NBER Working Papers 16579, National Bureau of Economic Research, Inc.
- Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680, June.
- Edwin G. West & Zhiqi Chen, 2000.
"Selective versus Universal Vouchers: Modelling Median Voter Preferences in Education,"
American Economic Review,
American Economic Association, vol. 90(5), pages 1520-1534, December.
- Z. Chen & Edwin G. West, 1998. "Selective Versus Universal Vouchers: Modelling Median Voter Preferences in Education," Carleton Economic Papers 98-02, Carleton University, Department of Economics, revised Dec 2000.
- Caroline M. Hoxby, 2000.
"Does Competition among Public Schools Benefit Students and Taxpayers?,"
American Economic Review,
American Economic Association, vol. 90(5), pages 1209-1238, December.
- Caroline Minter Hoxby, 1994. "Does Competition Among Public Schools Benefit Students and Taxpayers?," NBER Working Papers 4979, National Bureau of Economic Research, Inc.
- Ireland, Norman J., 1990. "The mix of social and private provision of goods and services," Journal of Public Economics, Elsevier, vol. 43(2), pages 201-219, November.
- Dennis Epple & Holger Sieg, 1999. "Estimating Equilibrium Models of Local Jurisdictions," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 645-681, August.
- Jackson, Matthew O. & Mathevet, Laurent & Mattes, Kyle, 2007.
"Nomination Processes and Policy Outcomes,"
Quarterly Journal of Political Science,
now publishers, vol. 2(1), pages 67-92, March.
- Peter Bearse & Buly A. Cardak & Gerhard Glomm & B. Ravikumar, 2009. "Why do Education Vouchers Fail?," Caepr Working Papers 2009-014, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
- Tim Besley & Stephen Coate, .
"An Economic Model of Representative Democracy,"
Penn CARESS Working Papers
ecf70d639d700dba5327ab0c8, Penn Economics Department.
- Rangazas, Peter, 1995. "Vouchers and Voting: An Initial Estimate Based on the Median Voter Model," Public Choice, Springer, vol. 82(3-4), pages 261-79, March.
- Eric J. Brunner & Jennifer Imazeki & Stephen L. Ross, 2010. "Universal Vouchers and Racial and Ethnic Segregation," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 912-927, November.
- McMillan, Robert, 2005. "Erratum to "Competition, incentives, and public school productivity"," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 1133-1154, June.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:17986. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.