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What Does a Voucher Buy? A Closer Look at the Cost of Private Schools, Cato Policy Analysis No. 486

What Does a Voucher Buy? A Closer Look at the Cost of Private Schools, Cato Policy Analysis No. 486

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Published by Cato Institute
Executive Summary

By most measures, America's K-12 public

schools continue on a path of mediocrity and stagnation.

For at least the last 20 years, various academics

and public policy organizations have emphasized

the need to introduce market forces into the

American K-12 education system, citing the lack of

competition and consumer power as the primary

explanation for why public schools don't improve.

To date, a number of states have implemented

school choice programs, seeking to instill elements

of competition and choice into their education systems.

Unfortunately, all of those programs are limited

in a number of ways. These limitations have

prevented them from developing into fully competitive

education markets. Implementation of a non-monopolistic

education market is still in the future.



An ideal school choice program would give

every child a voucher or tax credit to be spent on

educational services at any public or private school.

The amount of the voucher or tax credit should be

nearly equivalent to the amount of funds spent per

student in public school. Government figures indicate

that the average private elementary school

tuition in the United States is less than $3,500 and

the average private secondary school tuition is

$6,052. Therefore, a voucher amount of $5,000

would give students access to most private schools.

Since average per pupil spending for public

schools is now $8,830, most states could offer a

voucher amount even greater than $5,000 and still

realize substantial savings. A survey of private

schools in New Orleans; Houston; Denver;

Charleston, S.C.; Washington, D.C.; and Philadelphia

shows that there are many options available

to families with $5,000 to spend on a child's education.

Even more options would be available if all

parents were armed with a voucher or tax credit of

that amount.
Executive Summary

By most measures, America's K-12 public

schools continue on a path of mediocrity and stagnation.

For at least the last 20 years, various academics

and public policy organizations have emphasized

the need to introduce market forces into the

American K-12 education system, citing the lack of

competition and consumer power as the primary

explanation for why public schools don't improve.

To date, a number of states have implemented

school choice programs, seeking to instill elements

of competition and choice into their education systems.

Unfortunately, all of those programs are limited

in a number of ways. These limitations have

prevented them from developing into fully competitive

education markets. Implementation of a non-monopolistic

education market is still in the future.



An ideal school choice program would give

every child a voucher or tax credit to be spent on

educational services at any public or private school.

The amount of the voucher or tax credit should be

nearly equivalent to the amount of funds spent per

student in public school. Government figures indicate

that the average private elementary school

tuition in the United States is less than $3,500 and

the average private secondary school tuition is

$6,052. Therefore, a voucher amount of $5,000

would give students access to most private schools.

Since average per pupil spending for public

schools is now $8,830, most states could offer a

voucher amount even greater than $5,000 and still

realize substantial savings. A survey of private

schools in New Orleans; Houston; Denver;

Charleston, S.C.; Washington, D.C.; and Philadelphia

shows that there are many options available

to families with $5,000 to spend on a child's education.

Even more options would be available if all

parents were armed with a voucher or tax credit of

that amount.

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Published by: Cato Institute on Mar 26, 2009
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By most measures, America’s K-12 publicschools continue on a path of mediocrity and stag-nation. For at least the last 20 years, various acade-mics and public policy organizations have empha-sized the need to introduce market forces into theAmerican K-12 education system, citing the lack of competition and consumer power as the primaryexplanation for why public schools don’t improve.To date, a number of states have implementedschool choice programs, seeking to instill elementsof competition and choice into their education sys-tems. Unfortunately, all of those programs are lim-ited in a number of ways. These limitations haveprevented them from developing into fully compet-itive education markets. Implementation of a non-monopolistic education market is still in the future.An ideal school choice program would giveevery child a voucher or tax credit to be spent oneducational services at any public or private school.The amount of the voucher or tax credit should benearly equivalent to the amount of funds spent perstudent in public school. Government figures indi-cate that the average private elementary schooltuition in the United States is less than $3,500 andthe average private secondary school tuition is$6,052. Therefore, a voucher amount of $5,000would give students access to most private schools.Since average per pupil spending for publicschools is now $8,830, most states could offer avoucher amount even greater than $5,000 and stillrealize substantial savings. A survey of privateschools in New Orleans; Houston; Denver;Charleston, S.C.; Washington, D.C.; and Philadel-phia shows that there are many options availableto families with $5,000 to spend on a child’s edu-cation. Even more options would be available if allparents were armed with a voucher or tax credit of that amount.
What Does a Voucher Buy?
 A Closer Look at the Cost of Private Schools
by David F. Salisbury
_____________________________________________________________________________________________________
 David F. Salisbury is director of the Cato Institute’s Center for Educational Freedom.
Executive Summary
No. 486August 28, 2003
 
Introduction
The idea of school choice goes back atleast as far as Thomas Paine, who in
The Rightsof Man
, proposed providing parents withfinancial support for sending their childrento private schools.
1
It was not, however, untilNobel laureate economist Milton Friedmandiscussed the idea in his 1962 classic,
Capitalism and Freedom
, that the conceptbegin to receive serious consideration inmodern America. Interest in school choiceaccelerated in 1983 following the release of ANation at Risk, a report by the NationalCommission on Excellence in Education.
2
The report identified a rising tide of medioc-rity in American education and forced educa-tion reformers and policymakers to take aserious look at what was wrong with theAmerican educational system.
3
A massivesurvey of public and private schools pub-lished by John Chubb and Terry Moe in 1990gave strong support to the growing belief that centralization and bureaucracy were themain causes of inefficiency in American pub-lic schools.
4
As evidence that America’s gov-ernment schools are overcentralized andbureaucratized, Chubb, Moe, and otherscholars pointed to the marked differencebetween America’s private schools and gov-ernment schools in terms of administrativeoverhead. It was noted, for example, thatNew York City had 6,000 administrators inthe government schools and only 25 in theCatholic schools even though the Catholicschools served nearly a quarter as many stu-dents.
5
Scholars such as David Boaz, in hisbook 
 Liberating Schools: Education in the Inner City
, noted the consistent trend over the lastseveral decades toward larger, centralizedschool districts.
6
Although in 1945, there hadbeen more than 100,000 school districts inthe United States, the number had fallen to14,881 by 1993 (see Figure 1). During thesame period, the number of studentsenrolled in public schools increased fromabout 25 million to more than 46 million, sothe number of students in each district rosedramatically.
7
As school districts became larger, schoolbureaucracies increased dramatically in pro-portion to the number of teachers in schoolclassrooms. Between 1960 and 1984, the
2
The idea of schoolchoice goes backat least as far asThomas Paine.
010,00020,00030,00040,00050,00060,00070,00080,00090,000100,000110,0001945–461949–501959–601970–711980–811990–911995–96
Source: National Center for Education Statistics,
 Digest of Education Statistics
,
2001
, Table 89.
Figure 1Number of Public School Districts, 1945–96
   N  u  m   b  e  r  o   f   P  u   b   l   i  c   S  c   h  o  o   l   D   i  s   t  r   i  c   t  s
 
number of nonteaching staff in governmentschools more than doubled, while the num-ber of teachers grew by only 60 percent.
8
Teachers now constitute only 52 percent of school personnel compared to 65 percent in1960 and 70 percent in 1950.
9
It wasn’t only free market intellectualsthat pointed to monopoly and centralizationas the core malady with public schools. AsAlbert Shanker, president of the AmericanFederation of Teachers, noted:Public education operates like aplanned economy, a bureaucratic sys-tem in which everybody’s role isspelled out in advance and there arefew incentives for innovation and pro-ductivity. It’s no surprise that ourschool system doesn’t improve: Itmore resembles the communist econ-omy than our own market economy.
10
In addition to causing massive inefficien-cies and waste, monopoly institutions tendto serve many or most of their clients poorly,especially in a large and diverse society. Aseconomist Walter Williams has written:A state monopoly in the productionof a good or service enhances thepotential for conflict, throughrequiring uniformity; that is, its pro-duction requires a collective decisionon many attributes of the product,and once produced, everybody has toconsume the identical productwhether he agrees with all the attrib-utes or not. State monopolies in theproduction of education enhancethe potential for conflict by requir-ing conformity on issues of impor-tance to many people.
11
During the past 20 years, reformers havefought desperately for changes that wouldbreak the government monopoly in K-12 edu-
Table 1Private School Tuition, by Type of School and Level: 1999–2000
Type of SchoolAverage TuitionAll private schools$4,689Elementary$3,267Secondary$6,052Combined$6,779Catholic schools$3,263Elementary$2,451Secondary$4,845Combined$6,780Other religious schools$4,063Elementary$3,503Secondary$6,536Combined$4,260Nonsectarian schools$10,992Elementary$7,884Secondary$14,638Combined$12,363
Source: Based on National Center for Education Statistics,
 Digest of Education Statistics
,
2002
, Table 61 (1999–2000).Elementary schools have grades six or lower and no grade higher than eight. Secondary schools have no grade lowerthan seven. Combined schools have grades lower than seven and higher than eight. Excludes pre-kindergarten students.
3
During thepast 20 years,reformers havefought forchanges thatwould break thegovernmentmonopoly in K-12 education.

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