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Public Education, Communities, and Vouchers

Author

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  • Mar�a J. Luengo Prado

    (Department of Economics, Brown University.)

  • Oscar Volij

    (Department of Economics, Brown University, and Department of Economics, Hebrew University of Jerusalem.)

Abstract

This paper examines the effects of school vouchers on public school quality in a simple two-community model with local provision of education. Individuals differ only by income and one community imposes a fixed exogenous costs on its residents. The equilibria of the model are stratified with the rich community providing better education with a lower tax rate. We show that the introduction of a simple voucher system can result in a Pareto improvement as an equilibrium phenomenon. This improvement brings higher education quality to both communities. However, the quality difference between communities is shown to increase in equilibrium.

Suggested Citation

  • Mar�a J. Luengo Prado & Oscar Volij, 1999. "Public Education, Communities, and Vouchers," Economic theory and game theory 008, Oscar Volij.
    • Handle: RePEc:nid:ovolij:008
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    Cited by:

    1. Martinez-Mora, Francisco, 2006. "The existence of non-elite private schools," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1505-1518, September.
    2. Francisco Martinez Mora, "undated". "Income Stratification Across Public and Private Education: The Multi-community Case," Discussion Papers 03/01, Department of Economics, University of York.
    3. Francisco Martínez Mora, 2004. "Opting-out and income mixing in urban economies:the role of neighborhood effects," Economic Working Papers at Centro de Estudios Andaluces E2004/67, Centro de Estudios Andaluces.

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    More about this item

    Keywords

    Public education; vouchers; communities.;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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