Working Paper: NBER ID: w9354
Authors: Dennis Epple; Richard Romano
Abstract: Epple and Romano (1998) show equilibrium provision of education by public and private schools has the latter skim off the wealthiest and most-able students, and flat-rate vouchers lead to further cream skimming. Here we study voucher design that would inject private-school competition and increase technical efficiencies without cream skimming. Conditioning vouchers on student ability without restriction on participating schools' policies fails to effect significantly cream skimming. However, by adding conditions like tuition constraints such as vouchers can reap the benefits of school competition without increased stratification. This can be accomplished while allowing voluntary participation in the voucher system and without tax increases.
Keywords: No keywords provided
JEL Codes: I2; H42
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| flat-rate vouchers (H41) | cream skimming (D49) |
| conditioning vouchers on student ability (I22) | cream skimming (D49) |
| tuition constraints (I22) | cream skimming (D49) |