张五常作品

(a) The school voucher system, whether money-making or non-profit, allows school children the free choice of schools, as compared to assignments based on localities or student performance.  This will increase competition among schools to recruit students.  However, if the schools are non-profit in nature, their incentives would be restricted to recruit enough students to sustain a comfortable survival, with no incentives to further improve the quality of teaching so as to enjoy the sharing of higher incomes.  If the schools are money-making organizations, the quality of teaching will vastly improve along with the free choice of schools.

(b) If money-making is allowed, the cash-convertible vouchers, under competition, will not yield profit for any schools, since profit is a windfall, totally unexpected.  However, some schools will be earning rents, or imputed rents, attributable to their superior or effective teaching.  It is because this rent capturing possibility that the voucher system was strongly urged by the Friedmans, implying the voucher system must be profit-oriented (actually rent-oriented) to blossom.

(c) If the parents are required to pay for their children’s schooling, the quality of students produced will be higher than under the voucher system allowing money making.  This is because the parents will drive harder bargains with the schools when they have to pay out of their own pockets, and they will monitor their children to study harder.  This is no more than saying customers going to restaurants tend to complain more if they had to pay for themselves, but complain less if they themselves do not have to pay.