Voucher programs enable students at low performing schools to be able to attend other, higher performing schools. The stipulation for this practice is that these students are attached to government funds that go to whatever school they attend.
This has its pros and cons. The main pro is that the student is able to further his or her education at an institution that may be more conducive to learning. Depending on the circumstances, the student may also be able to receive better social and life experiences as a result of the move. If the child is moved to a private school, then the private K-12 system receives funds that help it reach or maintain its optimal enrollment level.
On the negative side, the transferred student takes away funds that would have gone to the school that he or she was previously attending. Additionally, while this may seem like a temporary benefit, it may not target any underlying reasons for the student's or the previous school's performance. Basically, it simply states that the school has somehow failed this student and removes funds that could have gone toward improving the student's or the school's performance.
The study undertaken in Comparing Private Schools and Public Schools Using Hierarchical Linear Modeling surprisingly pointed out only modest differences between the performance of students in public and in private schools. In fact, the achievement levels between the two entities were, for the most part, nearly the same. These findings indicate that, while environment may play a crucial developmental role in student learning, teaching effectiveness is paramount and both entities possessed highly effective teachers within their ranks.
Thus, it could be said that the relative effectiveness of public and private schools is nearly equal.
In a private K-12 education system, externalities in consumption would prove to be a problem. Since this type of education operates for profit, it would be counterproductive for non-paying or non-targeted individuals to benefit from this system. At the same time, paying for education would be undesirable for most consumers, resulting in lost revenue for the private education markets.
The implementation of tuition subsidies can mitigate this by equalizing the gap between marginal private benefits (the private system's profit) and the marginal social benefit (the need for quality education without the associated high costs). Tuition subsidies are payments made to families or schools by the government to invest in certain educational endeavors be it attending certain schools or implementing certain academic or extracurricular programs.