School Vouchers and education

A number of economists led by the Nobel laureate Gary S Becker have vehemently argued in favor of improving school education standards by increasing school choice among students through the provision of school vouchers. They claim that this is a better alternative to subsidized public schools. Chile has pioneered school vouchers across the country more than two decades back, though its results are mixed.

It is widely percieved that public schools suffer from poor quality arising from poorly motivated teachers, inadequate facilities, and weak monitoring systems. What compounds the problem is that these schools attract predominantly the poorer children, many of whom often require more focussed and dedicated attention. As any teacher would agree, teaching such children is both expensive and hard, which goes against the weak public school doing a good job of teaching them effectively. The proponents of school choice argue that such children should have the choice of attending good private schools, thereby exposing them to better teaching and educational facilities. It is also argued that school choice will induce competition and force the inefficient public schools to get their act together and improve standards.

There is an interesting article in Free Exchange, School Market Magic, which argues that school choice may not necessarily succeed. It claims that achieving desirable educational outcomes requires atleast two conditions, "First, parents and students must demand schools providing good educations to poor students, and second, parents and students must be willing and able to inform themselves of which schools actually do a good job providing those educations."

It argues that for many families "the most attractive school might be the closest one, or the one with the best food, or the one with dominant athletic programmes, or (for busy or disinterested parents) the one with the longest school hours, or one simply chosen at random. In a voucher program, there is money to be made providing these options, and entrepreneurs will provide them." The richer families, given the greater availability of resources and time, are more likely to be discerning about the quality of their children's school. Conversely, since they are less likely be able to afford time and resources, poor parents are more likely to be have limited options about deciding the quality of their children's school.

There are a few forces at work oprerating against school choice and private market providing better overall educational outcomes.

1. Ceterus paribus, apart from good teachers and facilities, the sine-qua-non for a good school are a "critical mass of concerned parents and quality students", whose presence would "immediately raise classroom standards and school accountability".(For empirical proof, look around and try listing out the good schools in your area in terms of final educational outcomes, and then apply this twin test!) As Free Exchange writes, "Concerned parents exercise an oversight and involvement function displaying positive externalities--students without interested parents benefit from the involvement of other kids' interested parents. Quality students have a similar effect, by raising the level of instruction, increasing classroom expectations and the economies for resumé building activities. In a private market, desirable parents and teachers have an incentive to congregate together, in order to reduce free-riding by low-performing families, thus undermining the voucher system."

2. The second follows from the first. "Successful private schools have good teachers and excellent students, but as those schools expand, the supply of both runs thin. Private schools can't spread the talent around too much, or those parents demanding the best will move their children to places that aren't expanding, depriving the former high performing schools of their best students. Private schools aren't able to share the wealth on a grand scale, because there's choice in the market, and there will be constant exit at the top."

3. The weaker students are obviously less likely to contribute positively to the academic quality of the school, and are therefore more likely to be left out by good private schools. Similarly, the poorer parents, by being less demanding on their schools (not because they are poor or due to anyother personal attribute, but because to be demanding itself requires being able to spend money and spare more time, both scarce with the poor) contribute less towards improving the school standards. Therefore, they are more likely to be indifferent about the quality of schools being attended by their children.

Without going into the morals of it, the reality is that parents, especially the richer and the more discerning ones, with quality children will prefer to keep them in the company of similar children. With the first and second forces favoring congregation of the good quality students and the third favoring the congregation of weaker students, the later get left behind and in turn accumulate in the remaining schools. These remaining schools are more likely to be the public schools. In fact, a clear negative externality emerges from the private schools' (and quality children's parents') cherry picking, which leaves the weaker children with the weaker schools!

The emergence of skewedness and level of disaggregation depends on the intensity of the first two forces at play. In the less egalitarian and more divided societies, these forces are likely to be more active compared to the more egalitarian ones. However a similar distribution pattern is likely to emerge with any set of private schools. The central lesson is that school choice and vouchers, while improving choice for children, is less likely to improve the general educational standards.

This is in keeping with the findings of Joshua Epstein and Robert Axtell of the Brookings Institution, who studied the emergence of social patterns from interaction among group members in a computer simulated "sugarscape economy". Instead of starting with a given market and its fixed attributes, they set about recreating an economy from scratch, and agents with a few basic abilities and an environment with some natural resources. They modelled how the agents interact under various given initial attributes and endowments of the agents and the environment. At the start, the attributes are randomly distributed between the agents and the society is fairly egalitarian.

The skewed distribution is an "emergent property" of the system, which is a manifestation of the macro-behaviour that emerges out of the collective micro-behaviour of any group population. Various other empirical studies have shown the emergence of similar skewed distribution in cities among people of different economic and racial categories. It also explain other socio-economic phenomena like the rich getting richer and the poor poorer. Maybe it can explain school quality too!