Universal School Choice Programs Benefit All Children, Especially the Least Advantaged

 

Do Current Programs Work?

A recent meta-analysis of the research finds overall positive test score effects for voucher programs across the world.  Another shows that public school choice options benefited the least advantaged students the most!  Although these results are only slightly positive overall, we must realize that they would be much larger in a different system of schooling.  I argue that a school choice program that is accessible to all families, regardless of income, would actually benefit the least-advantaged students more than anyone.

Profitability Creates Choices

Amy points out that high-quality schools need to exist before they can actually be chosen.  This is obviously true, but not a valid argument against school choice programs.  This statement applies to any product.  Of course, automobiles needed to be produced before consumers could buy them.  But why was the automobile produced?  Because entrepreneurs noticed an opportunity to fill the need for additional transportation shared by many consumers.

If the government was already handing out automobiles to everyone for free, private companies would have quite a difficult time selling them at a price required to cover their costs.  Most of us would be stuck with the low-quality, free car provided by the government.  Since the government hands out schooling to all at a price of zero, we have a similar situation emerge: most students (particularly the disadvantaged) are stuck with the low-quality, free schooling option.

Currently, most voucher programs are means-tested, meaning that they are targeted to the least advantaged students.  At first, this seems intuitive: since we want to help the disadvantaged, we should only provide this program to the disadvantaged, right?  After all, we don’t want to give the children from affluent families an ever bigger advantage.  The counter-intuitive result is that a voucher program open to all children would help the least advantaged the most.

When a voucher program is targeted to a small subset of the student population, demand for private schools increases, but only by a very small amount.  Because of this, the number of private schools in the market are likely to remain mostly unchanged.  Of course, this is beneficial to the students receiving the voucher, but not nearly as valuable as it could be.

Effects of Market Entry

If we allow all families to reallocate the public school funding amount tied to their children, regardless of their income level, something very different would occur.  The demand for private schools would increase by a much larger amount.  Immediately, prices for schooling options would increase.  Entrepreneurs would notice the increased profit opportunity and have the incentive to open up schools that serve children well.  Once market entry occurs, the prices for schooling would decrease.  The result: many specialized, high-quality schooling options at a lower price.  Since the advantaged students already have access to high-quality schools, the disadvantaged have much more to gain.

Currently, less than 1% of the United States school-age population is enrolled in private school choice programs.  It is not a surprise that the number of high-quality private schooling options has not drastically increased as a result of school choice programs.  If we expand access to all students, the demand for private schooling options would increase a hundredfold.  Additionally, the annual expenditure on public schooling is over $620 billion in the United States.  That is very close to the size of the private restaurant industry, and we have an enormous set of diverse options for restaurants.  Just imagine how diverse and specialized our schooling options would be if we allowed all students to allocate their funding to the school of their choice!