Commentary | Education

School vouchers don’t make the grade

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Opinion pieces and speeches by EPI staff and associates.


School Vouchers Don’t Make The Grade

by Helen Ladd

Thank you for the opportunity to speak to you today. I am a professor of public policy studies and economics at Duke University. I have done extensive research on public school choice in the urban areas of New Zealand and have closely followed the literature on school choice in general, and on vouchers in particular, in the U.S. and in other countries, including Chile and Sweden. I am the author of a recent article entitled “School Vouchers: a Critical View “(Journal of Economic Perspectives, Fall, 2002) which I have submitted for the record, and also of a monograph, Market Based Reforms in Urban Education (Economic Policy Institute, 2002).

Like public school systems in many other large U.S. cities, the Washington, D.C. school system faces serious challenges, many of which are related to its high concentrations of economically disadvantaged students. Because one size school does not fit all and because students from low-income families tend to have far fewer schooling options than do students from higher income families, I support efforts to give low-income families more choice. The argument for greater choice is far more compelling, however, when it is cautiously applied to schools within the public sector than when it is extended to private schools, as would be the case under HR 684. This conclusion follows because policy makers are in a better position to assure fair access to public than to private schools and to hold schools that are publicly operated or publicly chartered and funded accountable to the public.

The counter argument would be that by expanding choice to private schools poor children will gain access to a set of schools that are superior to the public schools and as a result will achieve at higher levels. My first and most important message this afternoon is that expanding choice to private schools through a publicly funded scholarship program is not likely to lead to higher student achievement.

No achievement gains for students who use vouchers

The best evidence on achievement gains emerges from a series of extremely high quality studies by Professor Paul Peterson and his colleagues of privately funded voucher programs in New York City, Washington, D.C. and Dayton, Ohio.(See reference 1.) I refer to the studies in these glowing terms because they are all based on experimental research designs of the type that are common in medical research, namely experiments in which families who apply for vouchers are randomly assigned to receive a voucher for a private school or not. Gains in achievement can then be inferred by comparing the achievement of those who use the voucher to move to a private school with those who remained in the public school (with appropriate attention to some statistical issues along the way).

Based on three years of data from New York and Washington, D.C., and two years from Dayton, the authors find no evidence of an overall achievement difference between the public and the private schools either in the aggregate or for any of the individual cities. This finding that the private schools are no better at raising the performance of low-income students than are the public schools flies in the face of well-known claims made by pro-voucher researchers such as John Chubb and Terry Moe that the autonomy of private schools will make them more productive than the more bureaucratic private schools.

Only when the authors looked separately at the results for specific racial or ethnic groups did they find any positive differences between students who switched to private schools and those who remained in public schools. In particular, they report positive effects for African Americans, but even these effects are suspect because they are consistent neither across cities nor across grades. Consider, for example, the findings for Washington, D.C. Highly touted gains of over 9 percentile points in test scores for African Americans in the second year of the D.C. program completely disappeared by the third year of the program, by which time declines in test scores emerged for voucher users in some grades. Moreover, a reanalysis of the New York City data by Professor Alan Krueger and Pei Zhu of Princeton has subjected to question even the apparently stronger and more consistent findings for New York City. Krueger and Zhu found that when the definition of a black student was broadened to make it more consistent with OMB guidelines on racial identity and when the sample was expanded to include students who started in kindergarten, the statistically significant findings for African Americans reported by Professor Peterson and his colleagues disappeared. (See reference 2.)

These findings are not surprising. Undoubtedly, private schools come in many different forms, with some of them being very good and others being quite poor at raising achievement. The findings simply suggest that on average the sorts of private schools that are available to low-income students bearing vouchers are no better than the public schools. Importantly, however, it is worth worrying about the quality of any new schools that would emerge in response to an expanded scholarship program. Evidence from Chile’s 20-year experience with a voucher program, for example, shows that student achievement in the long-established, and generously resourced, Roman Catholic schools exceeded that in the traditional public schools, but student achievement fell short in the new secular for-profit schools that emerged in response to the voucher program. (See reference 3)

No compelling evidence of positive effects through competition

In the absence of achievement gains for the users of vouchers, it is reasonable to ask whether the introduction of a large scale voucher program would improve the education system by inducing public schools to compete for students with private schools. The evidence suggests that the jury is still out on this issue.

First, studies of the U.S. experience with private schools indicates at most a small positive impact of private schools’ competition on academic achievement in the public schools. A comprehensive review of 94 estimates in 14 studies shows that most were statistically insignificant and that any positive effects were either substantively small or subject to question based on subsequent studies. (See reference 4).

Second, the small size of most of the existing publicly and privately funded U.S. voucher programs means that competitive effects are likely to be small. Though some researchers have claimed large competitive effects from the 1998 expansion of the Milwaukee voucher program and from the Florida voucher program, the conclusions are suspect since it is not possible to separate the effects of the vouchers from those of other policy changes. For example, achievement gains in schools subject to a threat of a voucher in Florida are more likely to be attributable to the state’s accountability program than to the voucher program. (See reference 5.)

Third, potentially more reliable evidence emerges from Chile. Careful statistical analysis of the effects of vouchers on the traditional public schools in that country provided no evidence of they exerted a clear positive effect on the country’s traditional public schools. (See reference 6.)

Even if the evidence were to indicate that competition were a positive force for change, it is not clear why such competition would have to come from private schools rather than from within th
e public school system. Competition can be generated by permitting students to choose among traditional public schools or to switch to charter schools. Indeed one of the main arguments for charter schools is that their presence will improve the traditional public schools.

Defining the federal role with respect to voucher programs

Whether the federal government should be promoting a school voucher program in Washington D.C. raises a number of complex issues that are specific to that city and that are beyond the scope of my testimony. However, I would like to end my remarks with a final observation about the federal role in education policy innovations of this type.

If federal policy makers believe that a school voucher program similar to the one described in HR 684 has the potential to generate positive educational outcomes, and on that basis, decide to implement it in one or more cities throughout the country, it is incumbent on the federal government to make sure the program is fully evaluated. Careful evaluation would require designing the program from the beginning with evaluation in mind. Following the lead of Professor Peterson and his colleagues, such an evaluation would require that baseline data be collected on all applicants, that applicants be randomly assigned to receive a voucher or to be in the control group, and that all participants be followed over time. The current version of HR 684 falls far short of this standard for evaluation.

Since the benefits of experimentation and evaluation extend beyond any one district or state, a strong case can be made that the federal government is the most logical entity to engage in policy experiments and evaluations of this form. Personally I would prefer to have the federal government promote policy experiments that are more likely than vouchers to be promising for improving the achievement of disadvantaged students in urban areas. Such programs might include, for example, efforts to give high quality teachers stronger incentives to teach in urban schools serving large concentrations of disadvantaged students. Nonetheless if the chosen policy intervention is a school voucher program, taxpayer dollars will be well spent only if the program is subject to a formal evaluation so that it can generate useful information for other urban areas about the outcomes, both intended and unintended, of such programs.


1. William G. Howell and Paul E. Peterson, The Education Gap: Vouchers and Urban Schools (Brookings Institution Press, 2002).

2. Alan Krueger and Pei Zhu, “Another Look at the New York City School Voucher Experiment,” Processed, Princeton University, March 2003.

3. Patrick J. McEwan and Martin Carnoy, “The Effectiveness and Efficiency of Private Schools in Chile’s Voucher System.” Education Evaluation and Policy Analysis. Vol 22, no. 3. 2000.

4. Clive R. Belfield and Henry M. Levin, “The Effects of Competition on Educational Outcomes: A Review of the U.S. Evidence.” Teachers’ College, Columbia University, National Center for the Study of Privatization in Education, Occasional Paper no. 35, 2001.

5. Helen F. Ladd, “School Vouchers: A Critical View,” Journal of Economic Perspectives, Vol. 16, no 4, Fall 2002.

6. Patrick J. McEwan, “The Potential Impact of Large Scale Voucher Programs.” Review of Educational Research, Vol. 70, no. 2. Summer 2000.

Dr. Ladd has written widely on vouchers and other similar topics.
Her Bio can be found at
Her most recent colloboration with EPI that discusses vouchers can be downloaded at:


See related work on Education

See more work by Helen F. Ladd