page_title: School voucher
section_title: Background
hierarchical_section_title: School voucher / Economics / Background
caption_attribution_description: English: A graph showing the typical education and consumption bundles that a family has
context_page_description: A school voucher, also called an education voucher, in a voucher system, is a certificate of government funding for a student at a school chosen by the student or the student's parents. The funding is usually for a particular year, term or semester. In some countries, states or local jurisdictions, the voucher can be used to cover or reimburse home schooling expenses. In some countries, vouchers only exist for tuition at private schools.
  According to a 2017 review of the economics literature on school vouchers, "the evidence to date is not sufficient to warrant recommending that vouchers be adopted on a widespread basis; however, multiple positive findings support continued exploration." A 2006 survey of members of American Economic Association found that over two-thirds of economists support giving parents educational vouchers that can be used at government-operated or privately operated schools, and that support is greater if the vouchers are to be used by parents with low-incomes or parents with children in poorly performing schools.
context_section_description: Education as a tool for human capital accumulation is often crucial to the development and progression of societies and thus governments have large incentives to continually intervene and improve public education.  Additionally, education is often the tool with which societies instill a common set of values that underlie the basic norms of the society. Furthermore, there are positive externalities to society from education. These positive externalities can be in the form of reduced crime, more informed citizens and economic development, known as the neighborhood effect.
  In terms of economic theory, families face a bundle of consumption choices that determine how much they will spend on education and private consumption. Any number of consumption bundles are available as long as they fit within the  budget constraint. Meaning that any bundle of consumption of education and private consumption must not exceed budgetary constraints. Indifference curves represent the preferences of one good over another. The indifference curve determines how much education an individual will want to consume versus how much private consumption an individual will want to consume.
  Government intervention in education typically takes two forms. The first approach can be broad, such as instituting charter schools, magnet schools, or for-profit schools and increasing competition. The second approach can be individually focused such as providing subsidies or loans for individuals to attend college or school vouchers for K-12.
  Vouchers are typically instituted for two broad economic reasons.  The first reason is consumer choice. A family can choose to where their child goes to school and pick the school that is closest to their preference of education provider.
  The second reason why vouchers are proposed is to increase market competition amongst schools. Similar to the free market theorem, vouchers are intended to make schools more competitive while lowering costs for schools and increasing the educational quality for consumers, the families.
  In many instances where school voucher programs have been instituted, there have been mixed results, with some programs showing increased benefits of school vouchers and some instances showing detrimental effects.
caption: Education Consumption Choices
exif: {}