The Potential Impact of Vouchers

Abstract

This article provides an updated review of recent empirical research on the potential impact of private school vouchers. It addresses 3 questions: (a) do students that use vouchers to attend a private school obtain better outcomes than would be obtained in a public school? (b) Do vouchers encourage student sorting and how does sorting affect student outcomes? (c) Does the offer of vouchers promote competition, improving outcomes of students who remain in public schools? Conclusions are that African American students who are offered vouchers experience small achievement gains. The results are highly sensitive to analytical assumptions and are not evident for other racial or ethnic groups. The evidence further indicates that large-scale voucher plans encourage sorting that could lower the achievement of public school students. There is no compelling evidence that such losses are outweighed by competitive gains in public schools. The conclusions on sorting and competition are most applicable to unrestricted choice plans in which flat-rate vouchers are offered to a large number of students with few eligibility restrictions. Some emerging evidence indicates that alternate approaches to policy design could yield more promising results.