Abstract

http://ssrn.com/abstract=1456391
 
 

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Why Do Education Vouchers Fail?


Gerhard Glomm


Indiana University Bloomington - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Peter Bearse


University of North Carolina (UNC) at Greensboro - Department of Economics

Buly A. Cardak


La Trobe University - School of Economics

B. Ravikumar


Federal Reserve Bank of Saint Louis

August 16, 2009

CAEPR Working Paper No. 014-2009

Abstract:     
We examine quantitatively why uniform vouchers have repeatedly suffered electoral defeats against the current system where public and private schools coexist. We argue that the topping-up option available under uniform vouchers is not suficiently valuable for the poorer households to prefer the uniform vouchers to the current mix of public and private education. We then develop a model of publicly funded means-tested education vouchers where the voucher received by each household is a linearly decreasing function of income. Public policy, which is determined by majority voting, consists of two dimensions: the overall funding level (or the tax rate) and the slope of the means testing function. We solve the model when the political decisions are sequential-households vote first on the tax rate and then on the extent of means testing. We establish that a majority voting equilibrium exists. We show that the means-tested voucher regime is majority preferred to the status-quo. These results are robust to alternative preference parameters, income distribution parameters and voter turnout.

Number of Pages in PDF File: 39

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Date posted: August 19, 2009  

Suggested Citation

Glomm, Gerhard and Bearse, Peter and Cardak, Buly A. and Ravikumar, B., Why Do Education Vouchers Fail? (August 16, 2009). CAEPR Working Paper No. 014-2009. Available at SSRN: http://ssrn.com/abstract=1456391 or http://dx.doi.org/10.2139/ssrn.1456391

Contact Information

Gerhard Glomm (Contact Author)
Indiana University Bloomington - Department of Economics ( email )
Bloomington, IN 47405-6620
United States
812-855-7256 (Phone)

CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
Peter Bearse
University of North Carolina (UNC) at Greensboro - Department of Economics ( email )
Greensboro, NC 27402-6165
United States
Buly Cardak
La Trobe University - School of Economics ( email )
Bundoora
Bundoora, Victoria 3083 3086
Australia
+61 3 9479 3419 (Phone)
+61 3 9479 1654 (Fax)
B. Ravikumar
Federal Reserve Bank of Saint Louis ( email )
411 Locust St
Saint Louis, MO 63011
United States
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