Vouchers, Sprawl and Trade-Offs

Currently, the American public school system is a sprawl-generating machine: urban public schools are less appealing to middle-class parents than suburban public schools, causing parents to move to suburbia.

This result arises from school assignment laws: because students must attend school in the municipality of their residence, residents of the most diverse municipalities (usually central cities) must attend diverse schools.  By definition, diverse schools have lots of children from disadvantaged backgrounds.  Because children from disadvantaged backgrounds often learn less rapidly than middle-class children, these schools quickly get a reputation as “bad” schools, causing middle-class parents to flee to suburban schools that are more socially homogenous.

The common progressive answer to this problem is to fund urban schools more generously: this strategy has not, when tried, succeeded in bringing middle-class parents back to urban schools.  For example, in 1990s Kansas City, federal courts forced government to fund urban schools far more generously than suburban schools: nevertheless, test scores barely budged and urban schools continued to lose middle-class and white parents.  Even successful urban charter schools (such as New York’s Harlem Success Academy) have failed to bring back middle-class parents.

A more market-oriented solution to the problem of sprawl-generating school systems is to break the link between residence and schooling, so that city residents would not be limited to urban neighborhood public schools.

One possible option is some form of a voucher system.  Under the purest form of a voucher system, parents who choose to avoid public schools would be given public funds to pay the cost of private schools. Under such a system, parents would have little reason to avoid city neighborhoods: they could stay in the city, and their children could attend private schools for the same amount of money that they would spend on public schools (that is, zero).  Such voucher systems have occasionally been tried for low-income students or students in the worst urban schools, but have never, as far as I know, been applied to middle-class students whose parents might be tempted by suburbia.

However, such a voucher system might suffer from two practical difficulties.  First, many private schools are more expensive than public schools.  Most urban school systems spend roughly $10,000 per pupil– roughly comparable to the average private school tuition.  However, many private schools are far more expensive.  The average secular private high school charges over $20,000 per year.

If vouchers covered the entire cost of private school tuition, educational costs to taxpayers would increase.  On the other hand, if vouchers merely covered the cost of the average public school, they would merely reduce the cost of many private schools by only about half (and presumably less in high-cost regions)- enough to do some good, but arguably not enough to deter much migration to suburbia.

A second difficulty is that (assuming that existing public schools remain open) even a limited voucher system might increase municipal costs, because government’s public school expenses would not decrease as fast as its private school expenses would increase. Imagine a voucher system in which the money follows the child- that is, each voucher is $10,000, and so if a public school loses a child to a private school, that school loses $10,000.  If all of the child-losing schools’ costs varied with attendance, these schools would be no worse off: that is, they might have fewer children, but they would have fewer expenses.

But in fact this is not the case, because some of the public schools’ costs are presumably fixed, such as the costs of buildings and maintenance.  So if a public school that spends $8000 per pupil loses 10 pupils under a voucher system, its costs will not go down by $80,000.  Instead, its costs might not decrease at all.  A voucher system that fails to account for this difficulty might cause reduced spending on public schools.  If this outcome is undesirable, a city has two choices: to spend more money on the school system as a whole, or to fund private schools at some level below the average per pupil expenditure, thus allowing public schools to spend as much money as they do now. Under the latter scenario, parents would be able to save less private school tuition due to vouchers, thus reducing their anti-sprawl impact.

Does this mean vouchers are not worth trying?  Absolutely not.  Even a weak voucher system would have some anti-sprawl impact.  But vouchers are subject to a trade-off: the more choice vouchers provide to parents, the less likely they are to be cost-neutral.  A “strong” voucher system (that is, one that fully funds education at any private school in a region) is likely to be more expensive than the current educational system, but would make cities far more competitive.  A smaller, cheaper voucher system will do less for cities, but will be less costly for taxpayers.