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"Arguing in My Spare Time," No. 3.23

Arnold Kling

Oct. 24, 2000

Many people appear to oppose school vouchers on equity grounds. However, it is difficult to pin down this argument.

One voucher proponent tells me that he is opposed to markets in education, because "Markets create winners and losers." However, he is opposed to all markets for this reason. His point of view appears to be that markets are the poison apple of inequality in a Garden of Eden of natural prosperity. Given his lack of intellectual rigor, it is not surprising that he sends his children to private schools even as he denounces the voucher movement.

Instead, I take it as given that markets provide efficiency and innovation. The question then becomes, where would you oppose a market?

For example, I oppose a market in professional baseball. I do not care about other sports, but in baseball I value equity and tradition more than efficiency and innovation. I would like to see the cities own the teams, with revenue sharing and no free agency for players. That would lead to team continuity and to fewer advantages for big-market teams.

In education, I also value equity. However, in contrast with baseball, I do not dismiss innovation and efficiency. In baseball, if there is no innovation, and the quality of play holds steady, that is acceptable. Not so with education, where I believe that we need progress. Therefore, the case for a public sector monopoly in education is not as strong.

In education, there are two equity issues. One issue pertains to parental income. How much do we want the quality of a child's education to depend on the income of his or her parents? The other issue pertains to learning disabilities. How much spending on children with special needs is appropriate to compensate for their disabilities?

Our current educational system is regressive with respect to income. People with higher incomes tend to live in areas with higher property tax revenues, so that their children tend to benefit from more resources spent on schools.

With respect to learning disabilities, our system provides some special programs. However, it also has special programs for children who are gifted. In that sense, our current system includes regressive as well as progressive components.

With a voucher system, one could have somewhat more confidence in the equity of education. For example, we could give larger vouchers to people who have less income with which to supplement a voucher. In addition, we could give larger vouchers to students with learning disabilities.

My guess is that many people would be willing to pay a huge premium in order for their children attend schools that are regarded as the best. Wealthy families might be willing to pay tuition of $25,000 or more per year. It would be difficult to offer that much in vouchers to poor people to enable them to compete.

The case for enabling poor people to compete to send their children to good schools is that the schools are a major transmission mechanism for inequality. If you have the choice between leaving your child a million dollars or leaving her with a good education, chances are that the latter will have a more enduring effect on her well-being.

Therefore, it is conceivable that we would want to enact a "luxury estate tax" on private school tuition. If the tuition is above, say, $20,000, some of the tuition might be taxed. The revenue from this tax could be used to increase the money that is available for vouchers for low-income parents.

Determining the size of supplements for learning disabilities would be a challenge. As best as I can figure it, some government bureaucracy would have to identify the most desirable level of supplementary funding for a given disability. For example, the government might decide that a certain disability requires 40 hours a year of tutoring, at $25 an hour, or $1000 in additional spending. Then parents of children with that disability would receive an additional $1000 in voucher money.

Ultimately, the parents of children with learning disabilities would determine the types of programs that their kids receive. Relative to the educational enhancements used by the bureaucrats to set the amount of the supplement, parents could choose special programs that are more intensive, less intensive, or different altogether.

The voucher supplements associated with each disability would have to be sufficient to motivate schools to offer services for the learning disabled. If hardly any private schools offer programs for a learning disability, then this is a sign that the funds for that disability are not sufficient.

It would be a challenge to determine the amount of voucher supplement for each learning disability. These supplements would have to be based on difficult judgments about ethics and money. However, in our current education system, the same sorts of judgments are made. They are implicit in the programs that are provided to the learning disabled.

I do not know how to define perfect equity in education, and even if we could define it I doubt that we could achieve it. Our current education system is regressive with respect to income and not clearly progressive with respect to learning disabilities. With a voucher system that varies the amount of the voucher based on parents' income and on learning disabilities, we could arrive at a system that is more equitable.