Education Vouchers, Dropouts, and the Peer Group Problem 1

J. Stephen Ferris and Edwin G. West ()
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Edwin G. West: Department of Economics, Carleton University, http://www.carleton.ca/economics/

No 00-05, Carleton Economic Papers from Carleton University, Department of Economics

Abstract: In a series of recent papers, education economists such as Charles Manski (1992), Dennis Epple and Richard Romano (1998a, 1998b) and Thomas Nechyba (1999) have emphasized the presence of one particular educational spillover in the use of school vouchers – the “peer group” problem. This is an external effect that vouchers may have on the pool of students remaining in the public school system. By allowing low income students of high aptitude and ability to leave the public school system, a voucher system will encourage for-profit private schools to “skim the cream off” the public school system and so depreciate the average quality of students remaining behind. Because the quality of education received by students is in part a function of the average quality of their classmates, the loss of higher ability students reduces the quality of education received by those remaining. Hence a voucher system, it is argued, will promote inequity across students even as it improves the overall efficiency of the educational system.

Keywords: economics of education; education vouchers; school dropouts; peer group effects; education externalities (search for similar items in EconPapers)
JEL-codes: H3 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2000-03, Revised 2002-04
New Economics Papers: this item is included in nep-dcm, nep-edu, nep-lab, nep-pbe and nep-pub
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Citations: View citations in EconPapers (5)

Published: "Education Vouchers, Dropouts, and the Peer Group Problem", Southern Economic Journal 68: 4, 774-793.

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