Public Economics - Essay Example

Public Economics School Choice Introduction Education is one of the most important concerns of the governments of all countries as it is an integral part in development of a nation. In America, people have been extremely concerned about quality of public education. Public spending on education in America has been quite active, yet student performances in schools have not shown similar rise. As a matter of fact, this has led both researchers and parents to ponder upon the paradoxical situation that is being faced. Most of the reforms that had come up in the American society regarding elementary education had a common driving force, which is surge in parental choice. The major problem in the idea of dismantling monopoly of public school stems from the fact that such an approach will improve quality of public education by increasing competition among schools. The primary counter-argument against this topic is that if this method is followed, then poorer neighborhoods will be deprived as they will be unable to sustain themselves financially. The purpose of this essay is to critically discuss the role of parental choice in deciding the school so as to understand whether such a policy will be beneficial or harmful, from an economic point of view. School Choice Theory Several economists have pointed out to reasons that make political control of education inefficient. In fact, poor performance of schools in America had been largely linked to the public control of education. Economists who support this notion believe that political force, instead of forces of competition, drives production; otherwise, producers and consumers will end up spending more time in catering to the political needs, instead of focusing on satisfaction of consumers. Inefficiency creeps into the system as producers become complacent under protection of the government and consumers fail to obtain better quality of service. Public schools did not have to compete with their rivals, which had increased their social costs. The public had no choice, but to send their children to local national schools. This rendered the whole system ineffective (Gwartney 159-173). Friedman has been one of the earliest economists who had suggested the chief rationales that lay behind government intervention in the field of education, namely effects of the neighborhood and concerns of parents. The government had to make these two arguments in order to nationalize the system of education. However, according to the views of Friedman, the system of education could be improved without nationalization and had introduced the concept of education vouchers in schooling. Since development of this proposition, a number of researches have been done in this context. The study conducted by Coleman, Hoffer and Kilgore (1982) and Neal (1997) had focused on efficiency of the private sector as an alternative to public education. Another possible benefit that has been presented as a benefit of voucher system in schools is the peer effect spillovers among students in a classroom. Studies conducted by most researchers like, Hoxby (2002) and Neal (2002), had pointed out improvement of public education when exposed to competition (Gokcekus, Phillips and Tower 241-254). Vouchers have been one of the most widely propagated forms of schooling as this incorporates the choice of parents in schooling of their children. Under the system of voucher, schools will compete among themselves for drawing more students; and in the process, they will be bound to improve quality of education. Economically, this would lead to maximization of welfare because the best teachers could gravitate to the schools providing highest quality of service and innovation will follow. This idea had resonated very strongly among majority of economists as they believed that this will arrest the deteriorating quality of education in the American neighborhoods, despite the increased government expenditure in education. Ever since the beginning of the latest century, Libertarian government has been trying to promote the concept of vouchers in the education process in order to break monopoly of government. Their arguments can be put up in the following manner: Firstly, from the viewpoint of education theory, they argue that parental choice is integral in the education process of a child because level of achievement of a student is linked to the extent of involvement of the parents (Anthony 1-2). Secondly, from the perspective of economic theory that has been highly enriched by researches of Friedman, Hoxby and other eminent economists, it has been clearly indicated that vouchers promote higher quality of satisfaction at lower prices. Thirdly, from a political point of view, services that are subjective in nature should not be left under bureaucracies and government regulations; this may result in inefficiency in overall performance of market. This view is supported by authors like, John Chubb and Terry Moe. Finally, the opinion poll that has been conducted shows that majority of the public are in favor of voucher system of education (Allen 16). Another alternative form for reducing government monopoly in the public sector is introduction of charter schools. The legislation of the Federal government called “No Child Left Behind” in 2002 had severely restricted school choice among the public. Charter schools are mainly run by local leaders or parents and they receive funds from the government. The major argument behind introduction of charter schools is flexibility of the curriculum and insertion of competition in the otherwise inefficient traditional schooling. The economics behind this idea is that when charter schools start operating, parents will have greater flexibility to choose between the feeder district public education and the newly opened schools for which competition will heighten. This in turn would result in better allocation of resources. In the research that was conducted by Holmes, DeSimone and Rupp (2003), introduction of charter schools in North Carolina was studied. The results from their experiment had confirmed that when parents were given a choice on schooling of the child through charter schools, performance of the traditional schools had improved. However, results obtained from this model was in direct contrast to the findings of Bettinger (1999), who had shown that competition through charter schools could not improve performance of traditional schools (Holmes, DeSimone and Rupp, “Does School Choice Increase School Quality?”). Intra-district choice of schools is another option that is being explored by the policy makers to improve efficiency of public education. In a research that had been conducted by Hoxby (2000), the Tiebout choice of public in the American education system was examined. According to Hoxby, intra-district choice is one of the major determinants of public education in America. The results obtained from the models had confirmed that Tibeout choice could raise the degree of achievement and lower spending of the public schools. Results obtained from this research had also suggested that financial independence of the district schools is a major determinant of productivity of the state schools (Hoxby 1209-38). Vouchers and charter schools will sever the link between the state and education. Those in favor had based their arguments based on three important observations (Gokcekus, Phillips and Tower 241-254): Firstly, on the demand side, vouchers increase power of the parents who may not be capable enough to take the decision of the right schools for their children. Secondly, on the supply side, vouchers significantly weaken the teacher’s union and power of the government administrators who act as the biggest opposition to privatization. Thirdly, introduction of vouchers will remarkably strengthen power of the private schools, which would improve efficiency. Opponents Though there have been a lot of discussions that have suggested the fact that an alternative form of schooling like, voucher system, charter schools and intra-district schools, can improve the existing system of public education, which is marked with lower efficiency; yet, there are others who put a rationale behind public monopoly in the system of education. The main argument behind this opposition is the fact if government intervention is removed from the system of education and the alternative forms of schooling are introduced, then this will particularly affect the financially weak households and benefits will be polarized in favor of richer communities. The political decision making has heavily influenced the negative attitude towards adoption of a voucher system. It is believed that low and middle income families will be negatively affected by the voucher system. It has been argued that self-sorting by students under increased parental control will render some of them, particularly belonging to the poorer neighborhoods, worse-off. As education is the integral part in development of any nation, the government maintains its monopoly over the system of education and prohibits full-fledged privatization. The most important federal decision regarding education that has been introduced in America is the NCLB Act in 2002. This program has been promoted with the view of improving educational quality in weaker segments of the society. This system tries to raise quality of education in the public schools by imposing improved standards. Under this act, testing standards of schools are also set so that they can comply with them. The government has, therefore, maintained its monopoly in the public education system till date (Gokcekus, Phillips and Tower 241-254). According to the research that has been conducted by Krueger and Zhu (2002), it was seen that African American children of New York City were benefitted from introduction of the school choice programs. Their findings had another major implication, which was that the treatment effects were sensitive to race of the people. This implies that if caution is not exercised in use of vouchers, then the results may vary. Another criticism against the results was that most of the experiments regarding voucher schools and charter schools have been conducted on a pilot basis. So, there remain high chances that same experiments can be conducted by some other researcher without reaching the same results. Studies that were conducted by Ladd and Neal (2002) had also shown that impacts of the programs on school choice may lead to different results under dissimilar settings (Gokcekus, Phillips and Tower 241-254). One of the primary arguments against the voucher and charter forms of education is that though this raises flexibility of parents in sending their child to private schools; but, private schools have the right to reject the student for admission. The students may be refused on grounds of incompetency and low ability. As education is a fundamental right, this type of behavior will adversely impact overall level of development of the country in the long run. There is a long-running debate that whether the attempt to liberalize education will really improve freedom of parents or destroys independence of private schools by creating a web of subsidies. Arguments made by Bast and Harmer suggest that the system of alternate schools is not feasible because this would eventually lead to separation of education from the state. This can turn out to be dangerous as the resultant system will only provide benefits to the richer segment of the society. They have been extensively vocal about impact of vouchers on children in the inner-schools; an agenda that is almost ignored by proponents of vouchers. The poor neighborhoods will be severely affected as a result (Bast, “Vouchers and Educational Freedom: A Debate”). The chief arguments that are promoted by the opponents of voucher come from following grounds (“The Case Against Vouchers”): Firstly, from an educational point of view, achievements of students should be at the centre of educational reforms. However, no research done till date has explored efficiency of student achievement with vouchers, which makes the case of vouchers weak. Also, it is believed that voucher system will divide quality of education, which is not required. A strong argument made by National Education Association is that bringing new threats to the public schools will not necessarily improve their quality; instead, what is required is to provide proper help to failing students. Secondly, according to NEA, voucher lotteries are not a proper way to ensure enhanced educational quality because true equity lies in the fact that every child can attend a good school. The discrimination of private schools on the basis of race, religious and income background can act as huge impediments in the right to education. Thirdly, as most of the private schools are based on a religious background, it is believed that vouchers will adversely impact the society by undermining religious liberty of individuals. As religious education and practices are a vital part of curriculum, it is assumed that funding these schools through vouchers will indirectly promote religion, which is against the fundamental right of liberty (“10 Reasons Why Private School Vouchers Should Be Rejected”). Fourthly, role of political interest is also evident in the argument for voucher. Critics have labeled the voucher program as an elitist strategy; this is because it is observed as an instrument for subsidizing education in private schools and rarely helps the children from poor families. Charter schools are also accused of taking money away from poor neighborhoods. Charter schools can at best be the desired place for richer families as these are mostly considered as an alternative to the decaying traditional schools. Socio-economically backward people do not understand this sentiment most of the time and are eye-washed by grandeur of these schools. They fail to realize that their children may fail to secure admission in these schools. It has often been criticized that charter schools discriminate against their self-made policies. A classic example of this is the KIPP program, where black males were often sent to the neighborhood schools on grounds of unavailability of seats. Disabled students are also excluded from the charter schools (Paslay, “Why Charter Schools Exist Mainly Among Urban Poor”). Conclusion This paper has discussed the notion of reforms in the public system of education in America. This has been a majorly debated topic, where some researchers support the view that introduction of the voucher system, charter schools or intra-district school choice through freedom of parental choice will improve the failing quality of public education in America; while others are against the notion. The collective decision making of the government, at present, suggests that they do not want to break the present monopoly of the schooling system and introduce the alternate forms of schooling. The chief argument that has driven this type of a decision making has been discussed under the topic of opposition against the views. It can be concluded that the concern for poor children in the low income neighborhoods is the primary reason for which the government had not been able to embrace this system completely. Though this may improve efficiency from an economic and educational point of view, yet the results cannot be relied upon as most of the voucher programs have been conducted on a pilot basis. A particular segment of the population may be jeopardized if the voucher and charter schools are made an alternative version to education; this prevents the government from abandoning its monopoly over education. Works Cited “10 Reasons Why Private School Vouchers Should Be Rejected.” Church & State. Americans United, 2013. Web. 28 Mar.2014. Allen, See Jeanne . “What Americans Really Think of School Choice.” Wall Street Journal 17, (1996): 16. Web. 28 Mar. 2014. Anthony, Joy Dee . “Vouchers in California: Dimmer Prospects for 1996.” Special California Supplement, (1995): 1-2. Web. 28 Mar. 2014. Bast, Joseph L., David Harmer and Douglas Dewey. “Vouchers and Educational Freedom: A Debate.” Policy Analysis. Cato Policy Analysis, 1997. Web. 28 Mar.2013. Gokcekus, Edward, Joshua J. Phillips and Edward Tower. “School Choice: Money, Race, and Congressional Voting on Vouchers.” Public Choice 119, (2004): 241-54. Web. 28 Mar. 2014. Gwartney, James D. “A Positive Proposal to Improve Our Schools.” Cato Journal, Spring/Summer 10, (1990): 159-73. Web. 28 Mar. 2014. Holmes, George M., Jeff DeSimone and Nicholas G. Rupp. “Does School Choice Increase School Quality?” National Bureau of Economic Research, 2003. PDF File. Web. 28 Mar. 2014. Hoxby, Caroline M. “Does Competition Among Public Schools Benefit Students and Taxpayers?” American Economic Review 90, (2000): 1209-38. Web. 28 Mar. 2014. Paslay, Christopher. “Why Charter Schools Exist Mainly Among Urban Poor.” Chalk and Talk.” World press, 2013. Web. 28 Mar.2014. “The Case Against Vouchers.” National Education Association. NEA, 2014. Web. 28 Mar.2014. Read More