Wednesday, July 16, 2014

Ray Fisman on Swedish school vouchers

Ray Fisman reports on the Swedish experience with vouchers and how it hasn't quire worked out as well as one might hope.  Ray Fisman isn't a naïve opponent of school reform -- he has been willing to discuss some rather strong findings arguing for improvements in how we handle teachers.  But he is pretty rough on Sweden, which apparently has more students going to for profit schools than anywhere else in the developed world. 

He rather clearly points out the basic problem:
None of this is terribly surprising—in econ 101 we learn that markets work their magic when buyers and sellers are well-informed about what’s getting bought and sold, and can therefore transact with one another without fear of getting conned. The apparent failure of the Swedish schooling experiment is a lesson in the inability of markets to solve problems where it’s hard to compare the educational “product” that’s offered, and the outcomes you can observe are subject to manipulation. It’s also a reminder that the cold, hard calculations of markets aren’t necessarily suited to the realm of education. Governments don’t shut schools because they fail to turn a profit. Private equity firms do. The parents of more than 10,000 students learned this difference the hard way last year, when the Danish private equity group Axcel abruptly announced its exit from the Swedish school market, stating that it could no longer cover the continued losses.
If we had really good, real time information on educational quality then this would be a less difficult problem.  After all, if informed decisions can be made then it makes sense that a liberal country like Sweden would want to empower parents to make the best decisions for their children.  Now, it is possible to argue that tweaking some feature of the Swedish approach could result in better outcomes -- much is possible.  But these sort of ecological examples certainly raise the bar for evidence of this approach working when it is fully scaled up (unlike something like KIPP which isn't necessarily intended to scale to all children in the US). 

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