BOULDER, CO (May 25, 2021) – Private-school vouchers are multiplying. In 2021, at least a dozen state legislatures expanded voucher programs or created new such programs. This growth poses questions about what effects a universal voucher system would have on taxpayers. According to a new economic analysis, this economic cost would conservatively amount to between $66.5 billion and $203 billion annually.

Authored by professors Robert Shand of American University and Henry Levin of Teachers College, Columbia University, the policy brief released today titled, Estimating a Price Tag for School Vouchers notes that these input questions around vouchers have gone relatively unexamined, compared to the body of research around voucher outcomes. The brief also notes that any cost estimation must be based on considerable assumptions, which is why the brief errs toward conservative estimates and why the resulting range of estimates is quite large.

This brief focuses on examining the factors that determine these costs and provides an overview of the literature on the effects and costs of vouchers. It applies recent empirical evidence on policy effects, behavioral responses, and contextual factors to determine administrative costs of a universal voucher system. Based on this evidence, the brief analyzes five areas of potential increased costs, including the accommodation of additional students and system administration.

Because there is no state that currently operates a universal voucher system, Shand and Levin extrapolate based on empirical evidence from a wide range of smaller-scale voucher systems, pilot programs, and experiments to estimate a range of costs. They find that the total public costs of education would increase by between 11% and 33% with universal vouchers, depending upon both the exact design of the policy and the behavioral responses. Nationally, this would—as noted above—amount to from $66.5 billion to $203 billion per year.

Such research on costs has clear implications for further research and policy. True cost analyses consider what’s being purchased as well as the price tag. Because the body of research concerning outcomes suggests that vouchers are, as compared with traditional public schools, equally or less effective in raising student achievement, the larger price tag calls into serious question any empirical rationale for the current scale-up of voucher policies in states across the nation. These calculations also point to the need for increased transparency about the higher price tag of a voucher system, detailed data collection, and weighing the total voucher spending against current and future evidence of their likely effectiveness or benefits.

Professor Shand points out that, while the new analysis is not directly applicable to non-universal voucher plans, it provides a roadmap of factors to consider.

Policymakers may be interested in how these costs may change at levels short of a universal program. Estimating how costs would vary requires some speculation, as each voucher system has its own set of rules, and costs would depend on local context such as population density, as well as how schools and families respond to those rules in each context. For instance, more stringent eligibility criteria would lower costs by reducing the number of largely wealthy students who would have always attended private school and would now be subsidized by vouchers to do so, but also increase administrative costs to determine and monitor eligibility and divide administrative and transportation costs among fewer students.

“The universal estimate in this report builds upon a framework of factors that must be considered to understand how a voucher system and its transaction costs drive additional costs of the voucher infrastructure relative to the more conventional public school system,” adds Professor Levin.

Find Estimating a Price Tag for School Vouchers, by Robert Shand and Henry M. Levin, at: http://nepc.colorado.edu/publication/voucher-costs