Reflections on Universal School Vouchers

Milton Friedman pioneered the idea of school vouchers to revolutionize learning opportunities, empower parents with choice, and challenge the dominance of the state in education. According to Friedman, the state would give families a certain amount to cover education expenses, and then it was up to them to choose where they spend them, either in private schools or non-profits. ?The schools could charge any tuition they found fit and reject students as well. The ultimate iteration of Friedman’s vision meant that there would not be any state schools and the competition between different institutions would ensure parents always found the better option for their children. Consequently, the role of the state was limited to guaranteeing the curriculum and the preservation of common values.

As expected, his ideas caught on and over time, various iterations were tried with various degrees of success, such as in Sweden and Arizona. Both with different characteristics and practical applications, which we will explore.

The Swedish case

In the 1990s, Swedish centre-right policymakers influenced by Friedman’s essay decided to overhaul their education system. How did this work?

Firstly, more control of the school system was given to municipalities and towns, which were now responsible for operating state schools under a national curriculum.

On the other hand, there was a significant rise in private for-profit schools known as “Free schools”, which were also forced to obey the curriculum defined by the government and couldn’t charge above the amount set for each student, which meant both private and state schools were dependent on their number of students for funding. Furthermore, to prevent segregation and stratification, private schools were extremely limited when it came to rejecting students.

Unfortunately, over 30 years PISA (Programme for International Student Assessment) scores plummeted, national opinion of the school system declined dramatically, and segregation by class, race, and immigration status within the schools increased.

So, what went wrong?

Firstly, other than the PISA test, there are very few ways to independently assess students’ performance: National exams were often corrected by the respective student’s teachers, leading to generalised grade inflation. Hence, private schools which need students and their funding to break even preferred to go easy on correcting tests over hiring good teachers and investing. This translates into what I call the grade inflation trap.

Schools that didn’t perform up to standard would see students rush to better-performing schools, resulting in a further loss of funds and eventual closures.

The prime example is the Axcel group, a private equity firm that administered various private schools, while they accumulated losses over the years. Eventually, it became economically unviable to maintain and they had to close them, leaving students and personnel stranded.

Simultaneously, most families struggle to find space in the best schools, especially immigrant and lower-income families, since higher earners have better information in the market and schools can choose based on academic performance. ?Consequently, schools would prefer wealthy children since results are correlated to the economic background and parents would prefer schools which have students of a similar background.

Secondly, the weak oversight system in Sweden means that a lot of failing schools can operate with below-average learning results and poor financial results.

Lastly, state education is left to compete with the private system for funds, which means it must ensure results to keep parents happy, therefore at risk of falling into the same grade inflation trap as mentioned prior with private schools. Furthermore, the state system is often left with students from poorer communities and immigrant communities, which tend to have poorer results and need more support when it comes to integration.

Sweden did not fully fulfil the idea proposed by In December 2022, this vision became a reality, when the state of Arizona enacted a universal school voucher program. The Empowerment Scholarship Account (ESA), as it is called, provides roughly $7,000 of taxpayer dollars per child to cover a wide array of broadly defined “educational expenses,” including private school tuition, home-schooling, and other private expenses—with very few strings, if any, attached. ?

What could go wrong? For what it seems a lot.

Firstly, the program is used by those who can afford private education and those who cannot, which does not seem that bad. However, since there is no price capping for private education, tuition costs can simply rise reinforcing the already existing stratification. For wealthy families, this is a free bonus to be used in enhancing their children’s curricula for “free “, at the cost of taxpayers’ money, as verified by a study which found that 80 per cent of voucher applicants did not attend a public school, meaning they were already attending private schools or being home-schooled.

So, if we were to view this through the lens of a game, it seems the wealthier parents hold the dominant strategy, as they can always opt for the best education available. This leaves the remaining with two choices: private schools which they can afford, and that admit them or the state schools. Thoroughly driving the nail home, students who can’t access good private schools are left with underfunded, underserved, and stratified state schools. The same state schools that must help at-risk groups, now with less money and the same fixed cost. On top of that, when private schools with reinforced funding and underfunded state schools try to hire teachers, the financial capability is unbalanced between both agents. Consequently, private schools will hold the advantage when hiring and retaining personnel.

Furthermore, Arizona’s general fund pays out more for ESAs than it does to pay for state school education, according to research by the Joint Legislative Budget Committee (JLBC), the state legislature’s independent analysts. ?Therefore, the idea that the state is saving money by using vouchers is quickly dismissed, and they become a new source of expense.Moreover, this new cost still needs to include the cost of maintaining this new system and holding it accountable. Unfortunately, the program is not mature enough to get academic results.

In conclusion, we have two different systems based on the same ideas but with wildly different practical applications: Sweden with its Nordic spin and Arizona with a more libertarian adaptation. Both systems promised savings for the state which only once delivered, both promised educational achievements, and none have yet shown them either due to recency or failure. As we look at these systems, we must remember their ultimate goalof better education for all, regardless of income, origin etc... so we must ask ourselves if checks are the ideal solution.