All school age children are entitled to receive a voucher. The percentage of all students in private schools has risen from 10 percent to 30 percent, and the number of private schools has doubled. Who has benefited and who has lost from the adoption of the voucher program?

Losers

We shall list the losers first, because they are fewer and easier to identify:

Government educational administrators (bureaucrats). They are now fewer, and their discretionary control of funds has been curtailed by the need to meet the competition arising from empowering parents. Prior to the adoption of vouchers, government schools devoted to administration rather than to the classroom a far larger fraction of total spending than private schools — often more than half of total spending. Competition from the newly empowered private sector has forced government schools to spend a larger fraction of total spending in the classroom. Many cushy administrative jobs have been eliminated.

The officials and employees of the National Education Association and the American Federation of Teachers and their associated local affiliates. They have lost their monopolistic control of a government school system that had provided schooling for roughly 90 percent of all children. Dues revenue has fallen drastically. This is what they feared in advance, which is why they fought so hard against vouchers, spending large sums to stop every effort to introduce vouchers, however limited.

Some politicians. Those politicians who were able to determine the allocation of educational expenditures and to influence the appointment of personnel have seen their power decline. The reason is simple. With a government monopoly, they could dispense patronage through the school system. That is why local African-American politicians opposed vouchers, even though the rank-and-file African Americans they professed to represent were invariably the group that was most supportive of vouchers. In addition, most African-American politicians have been Democrats, strongly beholden to the teachers’ unions. That dam began to break in the late 1980s, first with Polly Williams in Wisconsin and then in the 1990s with J.C. Watts and Floyd Flake in the U.S. Congress.

Incompetent teachers. Competition has forced government schools to loosen seniority rules and union regulations that had made it nearly impossible to get rid of incompetent teachers. An early example occurred in Albany, NY, where a philanthropist offered vouchers to every student in the city’s worst school. After 20 percent of the parents chose to send their children to a non-government school, the principal was fired, teachers were reassigned, and major reforms were initiated.

Winners

Residents of inner cities. Improved educational opportunities have lowered dropout rates, imposed discipline in schools, and reduced school violence. More youngsters acquire the skills needed for employment, thereby raising economic levels and reducing street violence. Poor schools were not the only reason for the decline of the inner cities, but they played an important role.

Students who use the voucher to attend a private school of choice and their parents. Their actions speak for themselves. They, or more realistically, their parents, had a choice, and they chose what they believed would be best for their children. Every study of the early limited voucher programs — Milwaukee, Cleveland, CEO private voucher programs — reported that parents and students were glad that they were able to make a choice. Experience since has strongly reinforced that evidence.

Students who remain in government schools and their parents. The introduction of competition, as in the Albany example, has forced all government schools to reform in order to keep their clientele.

Employers. Improvements in education are making available a larger pool of potentially productive employees. Functional illiteracy and numerical incompetence are by no means gone, but they are starting to decline, and it is clear that the prognosis is good. Employers are already saving on the costs of training new employees, and are looking forward to still larger savings as the number of better schooled potential employees grows.

Competent teachers. A new, innovative, vibrant educational industry now competes for teachers. The reduction in administrative spending in government schools has added to the demand. The broader market for teachers pays more attention to quality and less to certification than the monopolized market did earlier.

Educational entrepreneurs and their backers. The availability of vouchers has led to the establishment of new schools, some non-profit, some for-profit. The new and growing education industry is marked by innovation, change, and variety. Old methods of teaching are being rapidly replaced by newer methods that are surviving the test of the market. Costs are going down at the same time that quality is going up — as happened when parcel and message delivery was opened up to competition, when the telephone monopoly was dismembered, when air travel was deregulated, when Japanese competition forced the U.S. automobile industry to change its ways, and on and on without number.

Taxpayers. Before vouchers, parents who sent their children to private schools paid twice for their children’s schooling, once in tuition and once in taxes to support government schools that their children did not attend. Now they still pay taxes but they get the equivalent of a tax refund. In addition, since vouchers equal only half of spending per child in government schools, total government spending on schooling has declined.¹ Spending per child has remained the same in government schools, but competition is forcing them to provide a better education at the same cost.

Existing private schools. These schools had been in the difficult position of charging for something that was available to their customers from government schools without extra payment. With vouchers, they are at less of a disadvantage in attracting pupils and have used the additional funds to improve still further the education they provide, even though that was initially good enough though that their customers were willing to pay twice for schooling for their children.

Institutions of higher education. They are benefiting from the sharp decline in the fraction of their entering students whom they find it necessary to place in remedial courses. Better-schooled entrants are enabling them to concentrate on their real function, higher education, rather than having to serve as a backstop for poorly performing elementary and secondary schools.

Society as a whole. Improved education is offering a hope of narrowing the gap between the less and more skilled workers, of fending off the prior prospect of a society divided between the “haves” and “have nots,” of a class society in which an educated elite provided welfare for a permanent class of unemployables. We have so far only seen the early fruits from the introduction of vouchers, from giving parents a choice. The best is yet to come as competition and the market work their wonders.

Notes

1. Roughly 10 percent of students initially attended private schools. Another 20 percent shifted to private schools. The savings from vouchers to this 20 percent is double the extra cost of vouchers to the 10 percent who attended private schools, leaving a net savings of 5 percent of total school costs.