Education
Education Reform: A Problem with School Choice
For those that are interested in education, “school choice” is the new buzzword. And with school choice come “education vouchers.” For economists of all hues, these two together are the solution to all that ails our (Indian or American) schools. So loud is the rhetoric, in fact, that nobody really questions whether school choice and vouchers really work?
In an interesting – and clearly very balanced – article on Yahoo! Finance, Charles Wheelan puts some doubt in our mind.
There’s just one problem with school choice: The data aren’t that compelling. Choice does seem to have modest positive effects. In places where school choice has been studied with appropriate controls, the test scores of participating students are a few points higher — though there’s often no difference at all in some subjects or grades.
He concedes that the theory of school choice is beautiful, and turning parents into consumers should align incentives. But theory doesn’t always lead to practice:
Most Ivy League schools accept less than 1 in 10 applicants. What kind of business turns away 90 percent of its eager customers — while often accepting those who can’t afford to pay over those who can? Why hasn’t Harvard doubled or tripled in size? Why hasn’t Yale quadrupled tuition? Those are the kinds of things that competitive firms are supposed to do when demand exceeds supply.
Of course, the best schools are often the best because they restrict the supply of difficult students. That’s part of competition, too. Competitive businesses make money by improving operations — but also by shedding loser customers. I expect that the Chicago Public Schools would be excellent if they had to accept only 1 of every 10 eligible students. (Indeed, the magnet schools in the system, which are allowed to select students competitively, are some of the best in the country.)
Market proponents of school choice forget that markets aren’t perfect, school’s may not be desirable businesses, and choice is often illusory.
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[...] to a new environment and the administrative/financial cost to parents of the process. Finally, and as pointed out by Charles Wheelan, schools tend to restrict supply simply to maintain quality. Consumer choice, then, is so limited [...]
[...] to a new environment and the administrative/financial cost to parents of the process. Finally, and as pointed out by Charles Wheelan, schools tend to restrict supply simply to maintain quality. Consumer power, then, is so limited as [...]