Why Market Forces Are Good for Education

School vouchers not only help the students who use them -- they also give public schools extra incentive to improve


Above: Students at a New Orleans charter school (Lee Celano/Reuters)

Several years ago, Paul was one of many children struggling through the Washington, D.C., public school system. In an interview as an 11-year-old, he looked back on his public school experience this way: "People screamed at the teacher, walked out of school during class, hurt me, and made fun of all my friends." His school experience changed dramatically after receiving a voucher through the D.C. Opportunity Scholarship Program, enacted in 2004. His family was able to send him to a parochial school in the District, setting him one step closer to fulfilling his dream of becoming an architect.

The idea that public education does not have to mean government education was a trailblazing one in the 1950s, when Nobel Prize winning economist Milton Friedman first outlined the idea of school vouchers. To paraphrase Friedman, just because Americans have agreed to the public financing of education does not mean they believe government should dictate where a child goes to school.

It was academic idea at the time, but school choice has caught fire in recent years and is now taking hold in states and districts across the country. The thirst for more options accelerated the movement in 2011, when 12 states and the District of Columbia either expanded existing programs or created entirely new options. In Arizona, for instance, parents of special-education children can now deposit 90 percent of the money the public school system would have spent on their children into an education spending account. They can then use those funds to pay for private school tuition, online learning, or special education services, or even roll it into a college savings account.

School choice works to improve outcomes so well, in fact, that many of the gains are produced at a far lower cost than what public school systems spend. Competition produces improvement but also works to lower expenses. It's a notion that is ubiquitous in other sectors of American society. As Senator Jim DeMint put it in a recent speech, to concede education to a government service is a terrible way to run schools.

Yet, for reasons having more to do with entrenched special interests than anything else, some people are uneasy about instilling market forces in our classrooms. They argue that allowing students to opt out of the public school system hurts those who remain behind. Not every parent is savvy enough to research all the options, this reasoning goes, which means that the most helpless children end up abandoned together in underfunded schools where nobody cares.

But let's look more closely at this argument. As it happens, the research tells a different story. In a meta-analysis published last March, education researcher Greg Forster looked at all of the gold-standard empirical studies conducted to date on school choice. Not surprisingly, in nearly every study, the students who participated in school choice showed marked improvement (and no study showed any negative impact on their achievement). But 18 out of 19 studies also showed that in areas where school vouchers were offered, students who stayed behind in public schools also had improved outcomes. The competitive pressure improved public school education in those communities as well.

In the words of researchers Jay Greene and Marcus Winters, the facts run "contrary to the hypothesis that school choice harms students who remain in public schools." Greene and Winters have seen this firsthand. Their study of a voucher program for special-needs children in Florida found that the competitive pressure significantly increased achievement for area children who remained in the public system.

Presented by

Lindsey Burke

Lindsey M. Burke is senior analyst in domestic policy studies at the Heritage Foundation.

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