Voucher advocates see parental choice as a means to an end—improving education through enhanced competition—but opponents fear such privatization would harm public schools. Early research on American small-scale voucher programs suggests that choice may yield beneficial effects. A massive, nationwide study of vouchers in Sweden proves the case.
The Swedish voucher experience is significant for several reasons. It extends over sufficient time for the supply of independent schools to expand and for public schools to respond. It has the potential to involve all the children in the nation and includes almost three hundred urban and rural municipalities. Unlike many American choice programs, few restrictions were placed on the entry of new independent schools. Unlike capitalistic America, moreover, Sweden is a socialist or mixed economy with a huge public sector, making the success of privatization unexpected.
Until 1992, Sweden's public schools were funded by the national government and operated by local municipalities. Then the national government adopted major reforms: Parents were allowed to choose their children's school. Municipalities were required to fund approved independent schools at 85 percent of the per-student cost of public schools. A national agency was given the responsibility for approving new independent schools. To receive government funding, independent schools had to forgo tuition charges, meet established educational standards, and admit students without regard to ability, religion, or ethnicity.
Now "almost anyone can set up a school and receive public funding," according to Swedish economists Fredrik Bergström and Mikael Sandström, who conducted the voucher study. They add, "Sweden has become one of the most permissive countries in the Western world with regard to allowing parents to choose schools freely."
The reforms produced none of the negative consequences feared by choice opponents. Far from hurting the public schools, competition from new independent schools has led to an improvement in the public schools. As in other markets for goods and services, greater competition leads to greater improvement.
The number of independent schools increased fivefold, and their student enrollments increased fourfold. Although many of these schools were established in affluent areas, they also expanded rapidly in less-privileged areas serving working-class and immigrant populations. A majority of the new independent schools are specialized or pedagogy based, not religion based. Corporations run 30 percent of the independent schools, and some companies are expanding rapidly.
The researchers also found no indication that higher-income earners chose independent schools to a greater extent than low-income earners, no evidence that freedom of choice led to increased economic segregation, and nothing to indicate that independent schools have fewer special-needs students.
"The main lesson to be learned from the Swedish reforms is that school choice works," conclude Bergström and Sandström. It's also far from being "a radical libertarian experiment," they note, because the schools are still entirely financed by public funds.
School markets work in Sweden. Is there any reason why they shouldn't work in the United States?