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Government Subsidies for Private Community Services: The Case of School Education


  • Buly A Cardak

    () (School of Economics, La Trobe University)

  • Phillip Hone

    (School of Economics, Deakin University, Burwood)


Governments confront potentially competing demands for increased provision of community services, prudent budgetary management and no expansion in taxes. In the areas of primary and secondary education, the federal government has attempted to deal with these pressures by using government subsidies for private schools to expand the size of the private school system and free up more resources for those who remain in the public education system. This initiative will be most successful when the demand for private education is highly responsive to private school fees and the subsidies are targeted at those segments of the school and student population that are most responsive to reductions in private school fees. The current system based on the overall Socio- Economic Status of each schools student population is probably an improvement over previous schemes, but it is still potentially inefficient because it does not target funds at the most fee-responsive groups.

Suggested Citation

  • Buly A Cardak & Phillip Hone, 2003. "Government Subsidies for Private Community Services: The Case of School Education," Working Papers 2003.01, School of Economics, La Trobe University.
  • Handle: RePEc:trb:wpaper:2003.01

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    References listed on IDEAS

    1. Bearse, Peter & Glomm, Gerhard & Ravikumar, B., 2000. "On the political economy of means-tested education vouchers," European Economic Review, Elsevier, vol. 44(4-6), pages 904-915, May.
    2. Alejandro Gaviria & Steven Raphael, 2001. "School-Based Peer Effects And Juvenile Behavior," The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 257-268, May.
    3. Hoyt, William H. & Lee, Kangoh, 1998. "Educational vouchers, welfare effects, and voting," Journal of Public Economics, Elsevier, vol. 69(2), pages 211-228, June.
    4. Ron W Zimmer & Eugenia F Toma, 2000. "Peer effects in private and public schools across countries," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 19(1), pages 75-92.
    5. F. Martinello & E.G. West, 1991. "Education Budget Reductions Via Tax Credits: Some Further Considerations," Public Finance Review, , vol. 19(3), pages 355-368, July.
    6. Williams, Ross A, 1984. "Interactions between Government and Private Outlays: Education in Australia, 1949-50 to 1981-82," The Economic Record, The Economic Society of Australia, vol. 60(171), pages 317-325, December.
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    Cited by:

    1. John Creedy, 2006. "Education Vouchers: Means Testing Versus Uniformity," Department of Economics - Working Papers Series 978, The University of Melbourne.

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