The importance of formal education has been magnified by recent economic trends underlying U.S. labor market demand for skilled workers. The following is an analysis of the importance of education to both the individuals acquiring education and of the benefits received by society resulting from increased educational attainment. The efficacy of America's educational system has become the primary concern of American voters. In response to this concern, various proposals to reform K-12 education have been introduced. This paper argues that, by empowering parents rather than bureaucracies, parental choice programs can improve educational quality and raise academic achievement within the nation's schools.
Special consideration is given to proposals that promote choice through saving incentives.
This paper examines the shortcomings of the federal aid system that have contributed to these trends and considers the most effective federal policies to expand educational opportunities. In particular, it considers the use of tuition tax credits and expanded Individual Retirement Accounts, two of the largest educational provisions contained in the Balanced Budget Act of 1997.