What research tells us about school vouchers

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  • School voucher programs are associated with positive results for participating students.

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  • In today's knowledge-based economy, it is absolutely essential to have a high school diploma.

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  • The return on investment in vouchers is clear, and the opportunities for creative problem solving are numerous.

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What research tells us about school vouchers

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Good Afternoon and thank you so much for the opportunity to speak with you today. My name is Michael McShane, and I am a research fellow in Education Policy Studies at the American Enterprise Institute in Washington, D.C. Before my time in the policy world, I worked as a high school English teacher in an inner city Catholic school on the west side of Montgomery, Alabama.

A survey of the research literature on private school voucher programs shows a consistent pattern. School voucher programs are associated with positive (though small) results for participating students and positive (but also small) results for those students that remain in traditional public schools.

In fact, it appears that the harshest criticism of vouchers is that they provide no better or no worse education at substantially less cost than traditional public schools.

Ten studies have used the best research methods we have available to evaluate the efficacy of voucher programs. Seven of them have found positive benefits in reading or math for some or all of the students participating, three found no effect, and none have ever found negative effects (summarized in appendix A). When looking at the students left behind in public schools, 19 different studies have been conducted, and 18 have found positive effects; only one has found no benefit. None has ever found negative effects.1

Now, as I said before, most of these findings have been small. But it is also important to note that these voucher programs are not always a true "apples to apples" comparison to the traditional public schools. The Milwaukee Parental Choice Program, for example, places the value of a voucher at $6,442, about half of what traditional public schools receive to educate students. The DC Opportunity Scholarship Program, at the time of its evaluation, was capped at $7,500, which is between a third and a half of what the DC Public schools spend to educate children.

I would like to touch briefly on one technical note that comes up a lot in debates over the research on school vouchers. When studying school choice programs, the most important feature of research design is correction for what researchers call "selection bias." Selection bias occurs when participants differ in ways that aren't controlled for in an experimental evaluation. Put directly, we cannot trust comparisons between voucher students and non-voucher students if we have reason to believe that students who pursue vouchers are different from students that do not in ways that might affect their performance in school. For example, we might believe that students who pursue vouchers are more motivated, posses more grit or perseverance, or have parents that are more involved in their education. If we don't take that into account when evaluating the program, we run the risk of greatly overstating its benefits.

Luckily, school voucher programs have been evaluated in a way to correct for this bias. Because voucher programs have been oversubscribed, that is, more children have signed up for the programs than there are spots, researchers have been able to assign vouchers to students via random lottery. By comparing students who have all entered themselves into the lottery, the only difference between the "treatment" and "control" group is random chance.

As a result, we can have great confidence in the findings of these studies.

But I don't doubt that many in this chamber question the amount of value that we put on student test scores. Lord knows I do as well. That's why it is important to look at other indicators of a voucher program to determine its efficacy.

Perhaps the most important indicator that has been tracked in evaluating school choice programs has been graduation rates. In today's knowledge-based economy, it is absolutely essential to have a high school diploma, and programs that can increase high school completion are highly sought after.

In Washington DC, where I live, students offered a voucher under the DC Opportunity Scholarship Program graduated at a rate 12 percentage points higher than their peers that lost the lottery. Those that actually used the voucher graduated at a rate of 91%, a full 21 percentage points higher than that those that lost and a full 35 percentage points higher than the District's 56% rate during that time period. And these students were not some affluent subset of DC students. In fact, applicants to the program were more likely to participate in the Federal Free and Reduced price lunch program, with 78% of program applicants participating versus 63% of students District-wide, and were almost 98% African-American or Hispanic.

In Milwaukee, which operates the nation's oldest and largest school voucher program, the Milwaukee Parental Choice Program, students that participated in the voucher program were 7 percentage points more likely to have graduated from high school on time, graduating at a rate of 76% to the Milwaukee Public Schools rate of 69%.

But in real world terms, what does that mean? Recently, I had a research report published in Education Finance and Policy, one of the nation's top peer-reviewed journals of education finance, that quantified the value of the DC Opportunity Scholarship Program. Students that graduate from high school make more money (and thus pay more in taxes), live longer, healthier lives, and are less likely to commit crimes. As a result, a high school diploma has a value (to the individual and society writ large) of over $430,000. Multiplying that figure by the increased number of graduates that the program created yielded a total benefit of over $183 million dollars, or $2.62 for every dollar taxpayers paid for the program.

In short, while not the vast sea change of excellence some advocates hope for, school vouchers are associated with any number of positive outcome for students. Similarly, there is absolutely zero evidence that vouchers are in any way harmful either to students participating in the program or those that stay behind in the public schools. The return on investment in vouchers is clear, and the opportunities for innovation and creative problem solving are numerous.

Thank you and I am happy to take any questions you might have.

Appendix A: Summary of studies of participants in voucher programs


[1] Information culled from Forster, Greg (2011) A Win-Win Solution: The Empirical Evidence on School Vouchers. Indianapolis: The Friedman Foundation for Educational Choice

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