University of Arkansas Office for Education Policy

What’s the deal with vouchers?

In The View from the OEP on April 3, 2019 at 2:06 pm

The Arkansas legislature is considering two bills, SB 539 and SB 620, that would make it easier for low-income students to attend private schools. These bills highlight two different approaches for expanding school choice by offering families money to cover a portion of their children’s private school tuition – often referred to as vouchers. Discussions about private school vouchers tend to elicit strong reactions from supporters and opponents alike, making it difficult to wade through the noise and understand what they are, why they exist, what we know about their impact. In this post we hope to help our readers understand the answer to these three questions.

What are vouchers?

 Vouchers are publicly funded grants or scholarships that are used use pay for private school tuition. Vouchers are not new in education policy. As the National Council of State Legislatures’ (NCSL) notes in their summary of vouchers’ history, “state support for private school education has existed in Maine and Vermont for nearly 140 years.” Vouchers have been used in higher education since 1965, offered by the federal government in the form of Pell Grants. However, there has been renewed interest in vouchers since the early 1990s when the first modern K-12 voucher program was established in Milwaukee.

Today twenty-three states offer some form of vouchers for private K-12 education, and they come in three different flavors: 1) tax-credit scholarships, 2) state-funded scholarships, and 3) education savings accounts. Eighteen states offer a tax-credit scholarship, 15 offer a state-funded scholarships, and 6 offer education savings accounts. While program design differs somewhat across states, most of these state-based voucher programs restrict eligibility to either low-income students or students with disabilities (i.e., who have an individual education plan (IEP)). Arkansas currently offers a voucher program called Succeed Scholarship Program to students with disabilities. For more information on state-based voucher programs check out the NCSL Interactive Guide to School Choice Laws and EdChoice’s summary of state choice programs.

Why do vouchers exist?

Vouchers are a public policy tool that can be used to increase families’ schooling options. This is especially true for low-income families who, in the absence of a school choice program, often lack the resources to choose a school different from the one to which they are currently assigned based on their address. Wealthier families, on the other hand, have many more schooling options because they have the resources not only to choose amongst a wider set of neighborhoods but also to send their children to private schools. School choice programs, like vouchers, can help ameliorate the inequity in schooling options, providing low-income parents with the ability to choose the school that best fits their children’ needs.

Some social scientists, most famously Milton Freedman, have also argued that providing more schooling choices in an environment where families have few if any options will increase overall school quality because schools will need to get better to attract and keep students.

What do we know about the impact of vouchers?

Over the years there have been many studies of K-12 education vouchers. Several of these studies are high-quality randomized controlled trials (RCTs) which provide researchers with the best chance of establishing cause and effect. Researchers have studied vouchers in many different locations/contexts and with varying designs (e.g., targeted to low-income families vs not). Despite the amount of high-quality research around vouchers, the story about their impact is equivocal. You can find good summaries of the research in Chalkbeat, Journal of Economic Literature (JEL), and School Choice at a Crossroads ch.4.

The research has studied vouchers’ impact on three main categories of outcomes: 1) voucher students’ achievement on standardized tests, 2) voucher students’ educational attainment (e.g., high school completion, college enrollment, etc.) and longer-term outcomes (e.g., criminal behavior), and 3) the effect on traditional public schools (e.g., achievement, finances, segregation, etc.).

Student Achievement

The results for the impact of vouchers on student achievement are mixed. While several older studies consistently found either no effect or a slight positive effect on achievement, four recent studies have found negative effects and one has found positive effects (see Figure 1 below, omits North Carolina results). Research design may have played a role in the studies’ findings – many of the older studies are RCTs, giving us significant confidence in their results; however, two of the recent studies are as well. The differences in the context and design of the voucher programs are likely more explanatory. The more recent studies evaluated programs that are less tightly targeted to low-income families and students with disabilities and, in some cases, included significant regulation that limited the supply of private options. Another explanation for the mixed results could be that the local public schools used for comparison in the recent research have gotten pretty good at delivering results on state tests. Regardless, while the overarching impact of vouchers on student achievement is not completely clear, it’s likely that, even when well designed, their impact is small to neutral and that the design and context of the voucher program matters a lot.

Figure 1: Math and Reading Test Score Impacts from 12 Voucher Studies

Reproduced from the Brookings Institution Evidence Speaks Reports, Vol 2, #18.

The x-axis is the estimated impact in standard deviation units. For each study, the dot represents the estimated mean impact and the bars represent the 95 percent confidence interval around the mean.

Screen Shot 2019-04-03 at 9.57.10 AM

Attainment and Longer-Term Outcomes

The research story for educational attainment and longer-term outcomes is more positive, although the evidence is not very strong. Several studies have found that vouchers increase high-school graduation and college enrollment. There is, however, mixed evidence on college completion with one study finding a positive impact and another finding none. A recent working paper produced by EDRE’s own Cory DeAngelis and Pat Wolf found that the Milwaukee voucher program reduced criminal activity and paternity suits among participants in adulthood. These results on longer-term outcomes are promising, but more evidence is needed to verify these initial findings.

Effect on Traditional Public Schools

Opponents of vouchers often claim that they harm traditional public schools by lowering the achievement of those left behind, decreasing resources, and increasing segregation. However, we are not aware of any rigorous evidence documenting these harms occurring in real-world programs. In fact, there is significant evidence that voucher programs improve traditional public school performance. As the JEL research summary linked above put it, “Evidence on both small-scale and large- scale programs suggests that competition induced by vouchers leads public schools to improve.” Likewise, there is significant evidence that voucher programs are either cost neutral or save the state and districts money. The evidence on vouchers segregation is not as robust, but does suggest that programs that target low-income families do not have a racially segregative effect (e.g., Louisiana, Milwaukee). However, just because these harms have not been documented in existing programs does not mean that they can be ignored. Policymakers must be aware of the potential harms and do their best to mitigate these concerns when they design voucher programs.

What does that mean for Arkansas?

As noted in the intro, the Arkansas legislature is considering two voucher bills.

SB 620 would create a pilot, state-funded scholarship program for low-income Pulaski County students. This bill is currently in the Senate education committee.

SB 539 would offer tax credits to individuals and corporations who make donations to a fund that will provide scholarships for low-income students to attend private schools. This bill passed out of the Senate a few days ago and is now set to be considered in the House. Seventeen other states already offer similar tax-credit scholarship programs (visit EdChoice for more info on these programs). Our colleague Julie Trivett has produced an analysis of the potential fiscal impact of SB 539, and found that under conservative assumptions the proposed tax-credit scholarship program will be effectively cost neutral.

The bills strictly limit eligibility to low-income families and cap the resources available so that the programs start small, which are both features of programs that have demonstrated positive impacts in past research. The bills also require participants to take a norm-referenced standardized test and schools to report results. Given the research evidence on private school vouchers, we see no compelling reason for policymakers not to consider piloting the proposed voucher programs. While the proposed programs are unlikely to yield large positive results or cost savings, they will increase low-income families’ schooling options and may lead to small improvements for participants and traditional public schools alike. If either of the bills are passed, the legislature should include a requirement that the programs be rigorously evaluated so that we learn from the experience.

  1. Tax dollars should not be used to pay tuition at private schools. I have no problem if you want to allow parents tax dollars to follow their children to a different school as school choice. But not private.

    1. Are you holding the private school accountable for the education of these students?

    2. Don’t you realize that if private schools had to educate all students that they would look just like public schools.

    I was an educator for 41 years. The great majority of public schools do a great job. Stop evaluating the schools based on only one criteria (test scores). After using a variety of criteria, if it is found that the school is failing, then close it and let the state take it over. Again, in the communities where schools are considered as failing, the private school would also fail if they had the same students and were judged by the same criteria. Are these students failing because of lack of instruction or some factor beyond control of the school. I do believe there are some failing schools. But not very many and those are the ones that need to be identified and closed are taken over by the state.

    The education ethic of the parents is the key. If the parents are poor but have this, their kids will achieve. All these type vouchers are doing is taking the better students from poor families out of the schools. If the school is truly failing, do something about it. This is not the answer.

    • Hi Jerry –
      Thanks for reading and sharing your opinion! We agree with you that many public schools are doing a great job. Offering low-income families additional schooling options through vouchers is not an indictment of public schools. In fact, research evidence suggests that public schools improve after voucher programs are adopted. We want parents across the income spectrum to have and be able to afford high-quality schools that meet their children’ needs.

      • It doesn’t have to be an indictment of public schools for this to be a bad idea. If that private school is held accountable for the education of any student, low income or otherwise, if that student is failing or has discipline issues, they will just tell that student to go back to the public school.

        Use the voucher to go to a school that will be held accountable. This is a bad idea introduced by someone that has no clue as to what the real issues are in failing schools.

      • Hi Jerry –
        Thanks for the follow-up. To be clear, we don’t think vouchers are a solution for failing schools. The proposed voucher programs will only only serve a relatively small proportion of the state’s students. But for low-income families vouchers can represent a big increase in their options and the likelihood that they find the right school for their children.

        In terms of accountability, the proposed voucher programs would require participating students to take standardized tests and the schools to report the results annually, but beyond testing, they will be held accountable by the parents who can choose to go to another school.

        Most schools, regardless of sector, find it challenging to deal with struggling students whether the issue is discipline or academic performance. Unfortunately, even public schools routinely suspend and expel children. One only has to look at the recent academic literature and news stories to recognize that this is an area where all schools need to improve.

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