After 60 years, do the arguments for K-12 vouchers still hold? 23

After 60 Years, Do The Arguments For K-12 Vouchers Still Hold?

Dan Laitsch Simon Fraser University, CA

Abstract In 1955, Milton Friedman authored a foundational paper proposing a shift in funding and governance mechanisms for public K -12 schools, suggesting that parents be awarded tuition vouchers that they could use to pay for private sector education services for their children, rather than relying on government provided neighborhood schools. Friedman theorized three cases in which such a system might fail, requiring greater involvement of the government in the education system: the presence of a natural monopoly; substantial neighborhood effects; and a breakdown in free exchange. This article examines these concerns by applying more than 25 years of school choice research in an attempt to answer the question, “ After 60 years, do the arguments for K-12 vouchers still hold?” Findings cited in this article suggest that Friedman was correct to be concerned about possible deleterious effects that may arise from a privatized system.

Keywords Neoliberalism, free enterprise system, government role, privatization, public policy, school choice, charter schools

Introduction Columbia had some form of publicly funded Tuition voucher programs have been in place in tuition voucher (or tax credit) system in place the United States since the mid-1800s. Both (American Federation for Children, 2013). The Vermont and Maine have programs in place that shift of Congressional control to Republicans as offer families tuition vouchers to use at public or of 2015 has re-energized efforts to expand choice private non-parochial schools, if they live in a programs within those and other states (Sen. locality that has no available public schools. In Tim Scott Discusses School Choice, 2015; 1955 (and again in a 1962 revision), Milton Layton, 2014; Republican National Committee, Friedman put forth a more modern proposal to undated). Before substantially increasing efforts expand such programs and bring the power of to privatize public schools, it is worth reflecting the market to bear on the public school system.1 on the theoretical foundation for the school His proposal launched what would become an ______ongoing effort to reform and privatize the public Corresponding Author: Dan Laitsch, Simon Fraser University, Surrey Campus, 250- school system in states across the United States. 13450 102nd Avenue, Surrey, B.C., Canada V3T 0A3 As of 2013, 18 states and the District of Email: [email protected]

Global Education Review is a publication of The School of Education at Mercy College, New York. This is an Open Access article distributed under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License, permitting all non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited. Citation: Laitsch, Dan (2016). After 60 years, do the arguments for K-12 vouchers still hold? Global Education Review, 3 (2). 23-32 24 Global Education Review 3(2)

choice movement, using research findings to generated significant bodies of research that can examine the outcomes of the movement thus far. allow us to revisit Friedman’s 1955 proposal, When he proposed tuition vouchers in examine the system he envisioned, and apply 1955, Friedman mapped out a careful series of research findings to the concerns he dismissed at conditions under which government should take the time. responsibility for using tax money to pay for a system of public schools. After establishing a Context compelling interest for government support of a In his 1955 article, “The Role of Government in public system, he next considered whether it was Education,” Friedman presented the case for necessary for government to also run the public education, and then described the role schools, or whether the government could that government should play in such a system. instead fund a program that would funnel public He defined, generally, the reason for government funds through parents to pay for a system of involvement in any economic activity, and privately operated schools. After concluding that identified three special cases where government such a system would indeed be feasible (and involvement is justified: the presence of a desirable) he explained specific market failures monopoly; neighborhood effects; and that might require government intervention in paternalism (who should make the educational the education sector—outcomes that could create choices for children). In 1955, he determined a compelling need for a stronger government that these situations were not a substantial risk. role in the management of schools. At the time, Seven years later, without explanation, he Friedman dismissed these potential outcomes as reduced these three cases to only two by unlikely, but held open the possibility that such dropping concerns related to natural monopoly evidence might arise once programs were put in in a revised version of the article (Friedman, place. 1962), although he did speak to “technical Voucher programs (like those envisaged by monopoly” in much the same way. Friedman) have now been in place in the United I have chosen to focus on Friedman’s States for over 20 years. While these programs original 1955 work primarily because he never have largely been local in nature, or limited to addressed why he dropped “natural monopoly” specific populations (e.g., high poverty or special from his list of concerns. Additionally, even in needs students), other countries (such as Chile the revised version, Friedman discussed the and Sweden) have well-established national problem of “technical monopoly,” suggesting programs. In addition, a number of other market- that whether one calls it a natural or technical oriented reforms have been created based on monopoly, the presence of a monopoly is a Friedman’s initial supposition that governments concern that government should address. should fund, but not administer, schools. For the Finally, in searches of scholarly research purposes of this paper, such programs also include databases, Friedman’s 1955 article is much more charter schools. frequently cited, suggesting it serves as the Charter schools are government-funded foundational article on school choice as far as schools that are “chartered” to deliver educational the research community is concerned. programs independent of public school In the article, Friedman “takes freedom of administrative structures. Charter schools may be the individual, or more realistically the family, as run individually (so-called “mom and pop” schools), [society’s] ultimate objective, and seeks to or by large scale providers—Educational further this objective by relying primarily on Management Organizations (EMOs). These voluntary exchange among individuals for the programs (in the U.S. and internationally) have

After 60 years, do the arguments for K-12 vouchers still hold? 25 organization of economic activity.” As such, limits to free exchange caused by a lack of clarity “government's primary role is to preserve the regarding the objectives of the public schools. rules of the game by enforcing contracts, Neighborhood effects result when “the preventing coercion, and keeping markets free.” action of one individual imposes significant costs (p. 124). While these are the ground rules put on other individuals for which it is not feasible to forth by Friedman (and other market theorists), make him compensate them or yields significant he also noted that there are at times gains to them for which it is not feasible to make justifications for greater government them compensate him” (p. 124). Essentially, it is involvement in organizing economic activity. impossible to quantify or obtain remuneration for the value individuals receive from the social Education for Citizenship stability that results from a commonly educated An important piece of Friedman’s work--one that citizenry. is frequently either overlooked or ignored, Free exchange may be limited by perhaps due to its simplicity--is his definition of “ambiguity in the ultimate objective,” what the purpose of public education. He noted that, Friedman calls a ”paternalistic concern for “A stable and democratic society is impossible children and other irresponsible individuals” (p. without widespread acceptance of some common 124)—in other words, the ability of the chooser set of values and without a minimum degree of to select a school or curriculum that will achieve literacy and knowledge on the part of most the purposes of public education: an individual citizens” (p. 124-25). As such, he identified two educated in a common set of values to at least important principles of public education: minimum academic standards. Therefore, if introduction to a common set of values, and a within public education there is a monopoly, minimum degree of literacy and knowledge. This substantial neighborhood effects, or challenges goal of a citizenry with a common set of values achieving the public purposes, then according to and basic level of literacy and knowledge Friedman increased government involvement remains central to his proposal, in particular can be justified to address these conditions. stemming from his discussion of neighborhood effects, but also important when considering the Monopoly “paternalistic concern for children” (discussed A monopoly exists where voluntary exchange is below). limited by the lack of provider options. This may be due to geographic challenges or the expense of Government Intervention in starting a new business. Utilities are frequently Economic Activity used as an example, since (for example) creating parallel infrastructure for delivery of electricity According to Friedman, there are only three would be both unwieldy and expensive, naturally major grounds on which government limiting the number of potential providers. As intervention in economic activity could be Friedman noted, in rural communities, the justified (1955), and all three stem from actions number of potential customers may be too small that restrict voluntary exchange among to make the presence of multiple providers individuals. The first is the presence of a economically viable. The choices in such cases, monopoly or another market imperfection that according to Friedman, would be unregulated would prohibit the voluntary exchange required private monopoly, state controlled private for market competition. The second is the monopoly, or public operation. existence of neighborhood effects. The final Interestingly, Friedman’s solution to this reason for government involvement would be

26 Global Education Review 3(2) problem was to suggest a hybrid approach: that Education, 2006). While central cities and rural the monopoly is allowed to exist, but that areas saw declines in numbers, there was vouchers are provided to allow competition to substantial growth in urban areas (from 7903 to arise where providers see a market. As he noted, 11,775). Similarly, while the number of religious “governments would continue to administer schools expanded by just 0.7%, the number of some schools but parents who chose to send nonsectarian schools grew by 44%. Interestingly, their children to other schools would be paid a the number of students enrolled in private sum equal to the estimated cost of educating a schools increased only slightly between 1990 and child in a government school, provided that at 2006, and by 2009 total enrollment had actually least this sum was spent on education in an declined overall (US Department of Education, approved school” (p. 130). 2012). Two related questions then arise. First, School choice options also include more where privatization has occurred, would public than attendance at private schools--in the United funding eventually lead to a return to States many parents (depending on locality) can government involvement? In other words, in choose to enroll their children in charter schools, privatized delivery systems, would the function magnet schools, or other public schools outside of the government as the funder ultimately lead of their catchment area. Research suggests that to re-regulation of the private sector, losing the these options also expanded considerably in the competitive benefits choice advocates theorize as 1990s and early 2000s (Bielick & Chapman, the primary justification for privatization? 2003; Linkow, 2011). The proliferation of school Second, within the concept of a monopoly, there choice options over the past twenty years is another force at play that isn’t specifically suggests that at least part of the Friedman’s addressed by Friedman, but still may influence theory—that the market will respond to demand the behavior of the system. In education, the if consumer choice is expanded—is supported; consumer is compelled by the state to access the however, Friedman’s concern that choice will not education services offered by the state (or other expand in geographically isolated and rural areas providers). In such a case, the way in which the is also supported by research (US Department of market system in the competitive arena evolves Education, 2006). may differ from that of a typical market Legislators are still working to change economy. school funding systems, making it difficult to state with any confidence if the expansion in What The Research Says options is sustainable or simply a short- term How Do The Market and System Evolve? response to recent policy changes. That said, The two questions that arise from the challenge there is some data collected that suggests some Friedman presented are: 1) In systems where the of these choice options may eventually be market has been opened, does the market consolidated under corporate and nonprofit respond by providing substantial new options; management organizations, ultimately limiting and 2) If the market does respond as theorized, choice and potentially leading to the presence of how does the system evolve? private monopolies in some areas. There is evidence to suggest an increase in For the past 13 years researchers have the number of private schools over the past two been collecting data on for-profit and not- for- decades. In 1989 there were 26,712 private profit Educational Management Organizations schools in the United States, expanding to (Miron, et al., 2001). EMOs manage one or more 28,996 as of 2006 (US Department of schools within the choice sector and range from organizations focused on individual schools to

After 60 years, do the arguments for K-12 vouchers still hold? 27 large conglomerates (such as Mott MacDonald) to but rejects as not feasible given differences in and publicly traded publishing houses (such as family sizes and resources), Friedman argued Pearson, PLC). Currently 35% of all charter that education is a valid function of government. schools are run by EMOs, enrolling 42% of all While he uses neighborhood effects to justify charter school students. Large EMOs manage the imposition of both a common curriculum and bulk of for-profit charter schools (70.7% are public funding, he breaks with the current operated by 14 large EMOs) while 79% of non- system by suggesting that public funding does profit charter schools are run by large or not by definition require public management--in medium sized EMOs. In the voucher sector, other words, governments should be able to fund there is research to suggest that small private educational institutions though provision of schools are more likely to fail than larger schools tuition vouchers to parents for use at the (Ford, 2011), adding to concerns about how the institutions of their choice, as long as “schools market might ultimately respond to privatization met certain minimum standards such as the of education services. It will be interesting to see inclusion of a minimum common content in how the sector grows and consolidates over time, their programs” (p. 127). and if the concept of multiple providers is “One argument from the ‘neighborhood sustainable. effect’ for nationalizing education, according to Similarly, the legislative framework under Friedman, is that it might otherwise be which these schools run changes as political impossible to provide the common core of values changes bring in new policy priorities. Schools deemed requisite for social stability” (p. 128). He participating in choice programs frequently continued, “Schools run by different religious experience shifting requirements regarding groups will, it can be argued, instill sets of values accountability, funding, student eligibility and that are inconsistent with one an other and with data reporting, and some programs, such as the those instilled in other schools; in this way they one in Milwaukee Wisconsin, have seen a return convert education into a divisive rather than a to greater government regulation as they evolve unifying force” and that, “the link between the (Rubelen, 2006). financing of education and its administration places other [private] schools at a disadvantage: Neighborhood Effects they get the benefit of little or none of the Friedman makes a strong case for the public governmental funds spent on education;” funding of education, noting that a stable and however, “elimination of this disadvantage democratic society requires that citizens have a might...strengthen the parochial schools and so set of shared values and a basic level of literacy render the problem of achieving a common core and knowledge. He notes that because of this, of values even more difficult.” (p. 128). the education of each child also benefits the A final point raised by Friedman regarding broader society, contributing to the welfare of the potential negative outcomes resulting from others even though the contribution cannot be neighborhood effects is that of exacerbated class quantified. This, he noted, results in substantial distinctions, i.e., when given choices, parents neighborhood effects in as far as educational would choose to send their children to school outcomes vary across localities. with children from similar backgrounds, To compensate for these neighborhood reducing the “healthy intermingling of children effects, Friedman suggested requiring a common from decidedly different backgrounds” (p. 129). curriculum, through the provision of public Even in 1955, Friedman was aware of the education. Rather than requiring parents to pay potential for a voucher system to be used to for this education (something he is sympathetic maintain class and ethnic distinctions. In a

28 Global Education Review 3(2) lengthy note within the chapter he discussed the stratification is available for some forms of large- move by some localities in the southern United scale school choice in the U.S. (specifically States to use vouchers as a means for charters and open enrollment). The available maintaining a segregated school system. While research suggests that choice programs in the he noted that he initially thought this was a mark U.S. do generally result in greater economic and against his proposal, after further reflection he ethnic stratification (Ben-Porath, 2012; Bifulco, maintained that the importance of freedom to Ladd & Ross, 2008; d’Entremont, & Gulosino, choose trumped the integration of schools. He 2008; Garcia, 2008; Jacobs, 2013; Koedel, Betts, stated, “Under [a choice] system, there can Rice, & Zau, 2010; Mickelson, Bottia, & develop exclusively white schools, exclusively Southworth, 2008). This trend is supported by colored schools, and mixed schools. Parents can research in other countries, where vouchers are choose which to send their children to. The much more widely used and firmly entrenched in appropriate activity for those who oppose the educational system (Levin, 1998). Research segregation and racial prejudice is to try to on Chile’s voucher system has found that the persuade others of their views; if and as they voucher systems has exacerbated inequities, with succeed, the mixed schools will grow at the public schools serving more disadvantaged, low- expense of the non-mixed, and a gradual income, and indigenous students than private transition will take place.” (pg. 131). voucher schools (Elacqua, 2009; Elacqua, & de A full critique of Friedman’s view that Gobierno, 2006; González, Mizala, & segregated schools are acceptable, and his Romaguera, 2004). Additionally, within Chilean general view that market economies are voucher schools there is further stratification colorblind (Friedman, 1962) is beyond the scope linked to differences in tuition levels (Elacqua, of this article, but is highly contested in both law 2009; Elacqua, & de Gobierno, 2006). Recent (Brown v. Board of Education, 1954) and research looking at outcomes in Sweden has also education scholarship (Coleman et al., 1962; found that choice policies resulted in a large Laitsch & Rodi, 2004; Wells, 2014). For the increase in social and economic stratification purposes of this article, I focus on his emphasis (Söderström & Uusitalo, 2010; Wiborg, 2008). that government administration of the schools may be required if research suggests that Free Exchange and Paternalistic Concern neighborhood effects are exacerbating class While Friedman identified the concept of distinctions that serve to break down the “paternalistic concern for children” as “common core of values deemed requisite for important, he spent little time in his essay social stability” (p. 128). Further, the research discussing the problem or the solution. He noted cited here includes the impact of market choice that, “The third [challenge] derives from an on class and racial segregation to test ambiguity in the ultimate objective rather than Friedman’s assumption that “The widening of from the difficulty of achieving it by voluntary the range of choice under a private system would exchange, namely, paternalistic concern for operate to reduce both kinds of stratification” children and other irresponsible individuals.” (p. (p.129). If research shows that privatization 124). In other words, the primary beneficiaries serves to exacerbate economic and racial of education are not able to exercise voluntary segregation, then it may be appropriate for exchange in a manner that accomplishes the government to intervene. goals of public education. Friedman turns to parents as the primary caregivers and identifies Economic and Racial Stratification them as the individuals who should be allowed to Research regarding economic and racial exercise choice on behalf of their children,

After 60 years, do the arguments for K-12 vouchers still hold? 29 although he acknowledges that “such a Cowen, Witte, & Wolf, 2014; Ji & Boyatt, 2007), procedure rests on expediency rather than social class and race (Lacireno-Paquet & principle. The problem of drawing a reasonable Brantley, 2008). Other research finds that while line between action justified on these most parents state that they choose schools for paternalistic grounds and action that conflicts academic reasons, their observed behavior is that with the freedom of responsible individuals is they chose schools based on peer composition in clearly one to which no satisfactory answer can terms of race and class (Lacireno-Paquet & be given.” (p. 124). Brantley, 2008; Wells, 2014). In effect, parents This doesn’t mean that this issue don’t choose for societal gain, but for personal disappears, however, or that there isn’t research gain, suggesting Friedman’s concern—that that we can use to interrogate the problem. If as privatization will lead to increased Friedman has identified, the primary purpose of fragmentation of society—may indeed be true. the public schools is to establish a citizenry with When looking at the type of information a common set of values, a basic level of literacy, available to parents making school choices, there and understanding of a specific body of is no standard data reporting system for school knowledge, then the choices made by consumers characteristics or achievement information, in a market based system can be evaluated with particularly with regard to private schools (and regard to their impact on these outcome goals. In charter schools). In many cases, parents rely on other words, do parents choose schools that will informal networks or the advertising and further Friedman’s stated goals of literacy, marketing materials provided by schools. common curriculum, and citizenship, or do they Research looking at the issue of charter schools, have other reasons for choosing their child’s in one urban area, has found that these schools school? A major cornerstone of market theory is tended to present information to parents that that consumers have access to the information targeted particular student groups, again further that will allow them to make the “best” choices. fragmenting schools (Wilson, Carlsen, & Rivera, In this case, do parents have access to enough 2015). Other research suggests that parent information about the schools they are choosing access to quality information varies by ethnicity to make the best choice? and income, and that their choice varies based on the type of information they are able to access Social Outcomes (Yettick, 2014). Finally, research in Sweden Looking into the research on social outcomes found very little standardized information (or associated with the use of private school even academic information) in school vouchers results in a complex picture. This is informational material (Johnsson & Lindgrin, particularly true in that many programs are 2010). designed to target specific groups of people, encouraging them to make choices they might Conclusions and not otherwise make. Even so, we can get a Recommendations general sense of the stated and observed This article is not intended to provide a definitive behaviors of families who choose schools. While review of school choice research, nor is it research shows that parents are generally more intended to argue the veracity of the arguments satisfied with their choice in school (Wolf, Friedman put forth in his foundational essay. 2008), it also suggests that parents are likely to Rather, the goal was to apply the available body choose the schools for other than academic of research to the specific concerns raised in that reasons, including religious affiliation essay. When Friedman made his proposal to (Denessen, Driessena & Sleegers, 2005; Fleming,

30 Global Education Review 3(2) shift management of public schools from the Notes public sector to the private he identified three 1. Friedman’s chapter focuses on both general challenges that could prove detrimental to such a education and vocational education, with shift: the presence of a monopoly that prevents vocational education serving as the branching choice; the presence of substantial neighborhood off point for a discussion related to higher effects that work to break down the common education. The current article only looks at educational experience needed for to support a Friedman’s arguments as they pertain to stable and democratic society; and the inability governance of the K-12 system. of the consumer (students) to fully exercise voluntary exchange. References While not definitive, research suggests that American Federation for Children. (2013). In your state. Washington, DC: Author. Available: there are substantial concerns in each of these http://www.federationforchildren.org/state-by- areas, suggesting that the move to a privatized state/. system may ultimately harm the public purposes Bielick, S., & Chapman, C. (2003). Trends in the use of of education as outlined by Friedman. In school choice: 1993 to 1999. Statistical Analysis Report. ED Pubs, PO Box 1398, Jessup, MD 20794- particular, there are important challenges 1398. regarding the societal fragmentation along Ben-Porath, S. (2012). School choice and educational economic and ethnic lines, and the presence of a opportunity: Rationales, outcomes and racial monopoly—particularly if the trend toward disparities. Theory and Research in Education 10(2) 171–189. consolidation of privatized educational services Bifulco, R., Ladd, H. F., & Ross, S. (2008). Public school through EMOs continues. A major purpose for choice and integration: Evidence from Durham, shifting to a privately run system was to expand North Carolina. Center for Policy Research Working choice and competition by increasing the Paper No. 109. Syracuse, NY: Center for Policy Research Maxwell School of Citizenship and Public number of providers and decreasing the amount Affairs. Available: of governmental oversight, management and www.ncspe.org/publications_files/OP172.pdf. regulation. Early findings from the recent Brown v. Board of Education, 347 U.S. 483 (1954). Available: expansion in education choice in the United http://caselaw.lp.findlaw.com/cgi- bin/getcase.pl?court=US&vol=347&invol=483. States suggests that while options have expanded Coleman, J. S., Campbell, E., Hobson, C., McPartland, J., over the past 20 years, there may be underlying Mood, F., Weinfeld, F., et al. (1966). Equality of trends in corporate consolidation that may work educational opportunity. Washington, DC: U.S. against the initial diversity in options over the Government Printing Office. Denessen, E., Driessena, G. & Sleegers, P. (2005). longer term. Segregation by choice? A study of group-specific Advocates of expanded school choice reasons for school choice. Journal of Education should think carefully about the design of the Policy, 20(3). pp.347–368 programs they propose. In the past, concerns d’Entremont, C., & Gulosino, C. (2008). Circles of influence: How neighborhood demographics and charter largely focused on empowering the choice of school locations influence student enrollments. New participants, and not the outcomes of that York: National Center for the Study of Privatization in choice. The research highlighted here, and the Education. Available: concerns raised by the foundational work of http://www.ncspe.org/publications_files/OP160.pdf Ford, M. (2011). School exits in the Milwaukee parental Milton Friedman, suggest that choice advocates choice program: Evidence of a marketplace? Journal need to also consider the outcomes of choice of School Choice, 5(2), 182-204. programs, and take seriously concerns related to doi:10.1080/15582159.2011.576576 the weakening of the broader public purposes of Friedman, M. (1955). The role of government in education, in Solo, Robert A. (ed), Economics and the public education. interest. Binghamton, New York: Vail-Ballou Press, Inc. pg. 124-144.

After 60 years, do the arguments for K-12 vouchers still hold? 31

Friedman, M. (1962). The Role of government in education, school choice options in U.S. school districts. Journal in Capitalism and freedom. Chicago: University of of School Choice, 5(4), 414-443. Chicago Press. Retrieved December 20, 2012 from Metcalf, K. (1998). Advocacy in the guise of science. http://books.cat-v.org/economics/capitalism-and- Education Week 18(3). 34,39. freedom/. Mickelson, R.A., Bottia, M., Southworth, S. (2008). School Friedman, M. (1962). Capitalism and freedom. Chicago, IL: choice and segregation by race, class, and University of Chicago Press. achievement. Boulder, CO: National Education Fleming, D. J., Cowen, J. M, Witte, J. F., & Wolf, P. J. (2014). Policy Center. Available Similar students, different choices: Who uses a http://nepc.colorado.edu/publication/school-choice- school voucher in an otherwise similar population of and-segregation-race-class-and-achievement. students? 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Research Association, Chicago, IL. About the Author Wolf, P., Gutmann, B., Puma, M., Kisida, B., Rizzo, L., & Dan Laitsch, PhD, is Associate Professor in the Faculty of Eissa, N. (2009). Evaluation of the DC Opportunity Education at Simon Fraser University and a scholar with Scholarship Program: Impacts after three years the SFU Centre for the Study of Educational Leadership and (NCEE 2009-4050). Washington, DC: National Policy. He is co-editor of the open access peer Center for Education Evaluation and Regional reviewed International Journal of Education Policy Assistance, Institute of Education Sciences, U.S. and Leadership (www.ijepl.org), and is active in the Department of Education. Available American Educational Research Association Special Interest ies.ed.gov/ncee/pubs/20094050/pdf/20094050.pdf Group on Research Use. Dr. Laitsch’s research interests Yettick, H. (2014). Information is bliss: Information use by include the use and misuse of research in teaching, school choice participants in Denver. Urban policymaking, and issue advocacy; and Neoliberal education Education. Published online before print September reforms (specifically high stakes accountability and 24, 2014. Available: assessment, and the privatization of public school systems). http://uex.sagepub.com/content/early/2014/09/23/ 0042085914550414.abstract