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a blog from young economists at Nova SBE

School Vouchers – The hot debate that might change Public Education in Portugal

According to Pisa results, Portugal is one of the OECD countries with the highest levels of education inequality and presents average scores below European average. The Portuguese government, on its role as a provider of universal education, should definitely improve the existing system.

            One of the most debated recent governmental proposals was the implementation of school vouchers. The minister of Education exposed his two main arguments for this policy – the competition that will be originated among schools will improve their quality (an argument concerning quality); and every family should have the right to choose between private and public schools (an argument concerning equality). Opponents to this measure provide arguments that curiously also defend both values. Our role as young economists should be therefore to look at the most probable scenarios that can be originated by this specific type of government subsidy.

            Inequality may arise from schools’ perverse incentives when reacting to this system. As schools will be financed by the number of students who will pick them, they will try to attract students by demonstrating good results. This can lead to a pre-selection of students with higher past or admission results. This can originate segregation among “good” and “bad” students. Although some literature defends that segregation according to ability may improve overall results, the initial difference on students’ results may be caused by factors other than students’ ability, such as parents’ income.

            Interestingly, Sweden has been implementing this system since 1992 though it constantly ranks on the top three countries with the highest inequality-adjusted human development index (IHDI). The fact is that in Sweden private schools are not aloud to charge top-up fees to higher income students or to select students through their grades or admission tests. Students are enrolled on a first come first served basis. For the system to work out, these strict rules should be implemented in Portugal. However, it would be necessary for the Portuguese private schools to renounce the privilege of choosing their students. The general public opinion in Sweden values immensely the equal opportunity for everyone to freely choose a school.

            As for the quality of the education system, the theory that by subsidizing the consumer of education instead of the producer, the quality of schools will improve through competition, creating a more efficient market, should be proved empirically. Studies provide mixed results of this policy, as many of these papers suffer from endogeneity problems. I analyzed therefore two papers that seem methodological and scientifically accurate. Cullen et. al (2006) use a lottery system to conclude that the voucher system does not influence students’ academic results, but it improves other non-traditional outcome measures. Sandstrom et. al (2005) find that with the voucher system and competition, school results in public schools improve.

            After a potential social agreement, the Portuguese government should perform a cost benefit analysis and pilot experiences to evaluate the impact of this proposal. Nevertheless, the starting an informed debate on this issue is essential for a better quality and equality on the education system.

Joana Cardim #537

 

Bibliography:

http://www.publico.pt/sociedade/noticia/igualdade-para-mais-liberdade-1605366

http://www.jornaldenegocios.pt/opiniao/detalhe/o_cheque_ensino_e_a_liberdade_na_educacao.html

http://www.rtp.pt/noticias/index.php?article=678725&tm=8&layout=122&visual=61

http://www.jn.pt/PaginaInicial/Sociedade/Educacao/Interior.aspx?content_id=3363378&page=2

http://www.publico.pt/sociedade/noticia/crato-anuncia-que-estado-vai-apoiar-directamente-alunos-dos-colegios-1604999

http://super-economy.blogspot.pt/2011/03/on-swedish-voucher-system.html

http://news.bbc.co.uk/2/hi/uk_news/education/3717744.stm

http://pricetheory.uchicago.edu/levitt/Papers/schoolchoicelottery.pdf

http://www.telegraph.co.uk/news/1435386/How-choice-has-transformed-education-in-Sweden.html

http://www.sciencedirect.com/science/article/pii/S0047272704000404

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Author: studentnovasbe

Master student in Nova Sbe

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