Rethinking the Welfare State: The prospects for ... - e-Library

Rethinking the selfare state 154
parents choose the school to which they wish to send their children and the money then
follows the parents’ choices, albeit in a way that is invisible to parents (they do not
receive a paper voucher). 105 In this manner, schools experience the full fiscal benefits of
attracting students and the full fiscal losses of losing students. This increases the
incentives for schools to respond to competition and improve both the quality of their
programs and the efficiency with which they manage their budgets. This feature
undergirds Justesen’s views that “the principles of free choice and consumer exit are fully
implemented” in this system. 106 The cost-efficiency in the Dutch system is evidenced by
the fact that the Netherlands per-pupil spending is close to the OECD average. In 1998, it
spent US$3,795 on primary education and US$5,304 on secondary education, and the
per-pupil cost of public and independent schools does not differ significantly. 107
Another notable aspect of the Dutch system is that the amount of money allocated per
pupil is weighted according to the socio-economic background of each student. 108 As a
consequence, there is also evidence that the Dutch system increases socio-economic
integration in schools by inducing schools to compete to attract students from the most
impoverished socio-economic backgrounds. In this respect, Justesen reports that “the
social composition of pupils in independent and public schools does not differ
significantly.” 109 Finally, the effectiveness of the education system is evidenced in
student achievement levels. The Netherlands has the second highest reading literacy
among developed countries. 110 It has been contended that, “this is the major benefit of an
education system promoting the principles of ‘consumerism’ and demand-responsive
schools without imposing prohibitive cost on parents.” 111
COLOMBIA
The Colombian voucher system was implemented in 1991 with the intention of aiding
low-income families, who had been disproportionately affected by the shortage of places
in public secondary schools. The stated goal of the program was to improve student
achievement by moving towards a decentralized education system, and was part of a
larger effort to expand the private provision of public services. 112 By the beginning of the
1994 school year 90,807 students were using vouchers, which were valued at about
US$143. Recipients are limited to “children residing in neighborhoods classified as
falling into the two lowest socioeconomic strata (out of 6 possible strata).” 113 Although
the program is means-tested, the large number of students awarded vouchers suggests
that the negative consequences of government monopoly are mitigated to a large extent.
This is further compounded by the fact that private school enrollment as a proportion of
total enrollment in Colombia is approximately 2–3 times that in the United States. 114
Therefore, there are enough suppliers to ensure that there are at least moderate
competitive pressures in operation. Results from the Angrist et al. study show that lottery
winners (voucher recipients) score over 0.2 standard deviations higher than lottery losers
(program applicants not receiving vouchers), which is roughly the score gain associated
with one additional school year. 115
Other non-academic benefits have been attributed to the voucher initiative. The
program has been successful in helping low-income students gain access to private
schools, and has also served to reduce overcrowding in the public schools. 116 Researchers
at the Massachusetts Institute of Technology found that students who received vouchers