voucher macro

Due: Sunday by 11:59 pm at the end of Unit 2.

Vouchers to Pay Private School Tuition

Two conditions that justify government intervention in a market are the presence of external

benefits and equity concerns. Both of these issues are present in the case of primary and

secondary education in the United States. Think about what education without government

education would look like. In the absence of government intervention, all primary and secondary

education in the US would be private. Public school districts would not exist. Parents would need

to pay private firms (schools) to educate their children.

External benefits

If all education were private, it’s likely that people would buy too little education, from society’s

point of view. External benefits are one reason. When a child is educated, he or she benefits and

we expect his or her parents to take those benefits into account when they purchase education.

But there are additional benefits to society which parents may ignore. As people become more

educated, they are less likely to be unemployed or be criminals and are more likely to volunteer

and vote. The presence of these external benefits is an example in support for the government

getting involved in education.

Equity

Many families in the United States have low incomes. Among all children in first through twelfth

grades in 2001, 46% were from families with incomes below $40,000. Since the cost of private

education would be an important share of these families’ incomes, most Americans would be

concerned about the fairness of relying on markets to decide how much education children

receive. Current spending by these families on private education provides some support for this

concern. Of all children in private school in 2001, only 25% were from families with incomes

below $40,000. Therefore, equity concerns are another example in support for government

getting involved in education.

Providing vs. producing education

Most economists think external benefits and equity concerns justify government intervention in

education. But it is important to distinguish between government production of education and

other forms of government intervention. At the level of elementary and secondary education, K-

12 education, government intervention today mostly means production of education by local

school districts. To benefit, children must attend public schools. But this is not the only form

intervention could take.

ECO201 – Macroeconomics

Unit 2 Assignment: Vocher Viability

There are other markets where government intervention takes the form of subsidizing people’s

access to products—think of financial aid to college students, for example. Many people in the

US think that government should move from producing education to subsidizing access.

One form that subsidy could take is government providing vouchers to parents. Parents would

use the voucher to help pay for their child’s education in a private school. After it receives the

voucher, the school would turn it in and be paid by a local or state government.

Today there is a lively debate between people who think K-12 education should be delivered

publicly and people who think quality and efficiency would be higher if government provided

vouchers and the education was delivered by private schools. Some of these quality and

efficiency arguments can be based on material we covered this week. Price competition between

private schools will pressure each one to produce efficiently. Competition for students will lead

private schools to offer programs of interest to parents and their children.

Answer the questions below and make use of the sources supplied. Be sure to cite you sources in

your answers.

1. Explain whether a potential exit by students with vouchers will lead to the improvement of public schools.

2. Discuss whether the implementation of vouchers will lead the best students to leave public school, which could lead to a decline in education for the students left behind in

the public schools.

3. Consider what might happen to the students who use vouchers to leave public schools in order to attend private schools. How might their academic performance change as a result

of switching?

4. Finally, think about the impact of a voucher system on the students in an urban setting. Describe whether all families would have an equal opportunity to access education.

Your final product will be a paper that:

 Addresses each of the four questions above in total.

 Is APA formatted.

 The body is to be 2 pages minimum.

The requirements for your assignment are: 1. Answer each question fully 2. Define the overall subject of each question. 3. Cite at least three (3) resources from this week’s materials.

Students: Be sure to read the criteria and review the grading rubric on the next page, by

which your paper/project will be evaluated, before you write, and again after you write.

Evaluation Rubric for Unit 2 Assignment

CRITERIA Deficient Proficient Exemplary Points

Earned

Complete

Answers 0-24 Points Questions unanswered

and/or poorly

answered.

25-50 Points All questions

answered with 1-2

sentence inputs.

51-75 Points All questions

answered with

depth and clarity.

References to

Course

Materials

0-5 Points Less than 3

references, no

assimilation to the

questions.

6-10 Points 3 references,

minimal assimilation

to the questions.

11-15 Points 3 or more

references and

assimilations

show depth and

clarity.

APA Format 0-1 Point Format has errors that

impede professional

presentation; and/or

APA not followed,

reference page

missing.

2-3 Points APA format and

reference page has

few errors that do

not impede

professional

presentation.

4-5 Points APA format and

reference page is

clear,

professional, and

error free.

Writing

Quality 0-1 Point More than 7 writing

errors, to include

spelling and

punctuation.

2-3 Points More than 4 writing

errors, to include

spelling and

punctuation.

4-5 Points No writing errors.

Total 100