Schooling under Market Incentives: Educational and Political Consequences of the Swedish Voucher System

Abstract

School-choice reforms are intended to give families greater influence over where children attend school and to use competition for students to improve educational quality and efficiency. Yet introducing market incentives into education may have consequences that extend beyond these objectives. In the early 1990s, Sweden implemented a far-reaching reform that combined universal school choice with public funding for private schools, including for-profit providers. This dissertation examines how the resulting school system affects educational outcomes and local school markets, as well as electoral behavior and perceptions of political responsibility. The four papers combine Swedish register data, election results, and a preregistered survey experiment. Paper 1 compares outcomes among students attending municipal, for-profit private, and not-for-profit private schools and examines how private-school expansion affects local school markets. Private-school attendance is associated with stronger academic outcomes during compulsory school, but not with clear advantages in later education or income. At the municipal level, private-school expansion is associated with modest improvements in some educational outcomes, but also with greater segregation, particularly by migration background, and with little evidence of changes in overall educational costs. Papers 2 and 3 examine electoral responses to changes in local school provision. Incumbent parties lose votes in areas affected by proposed public-school closures, even when the proposals are withdrawn. School openings, by contrast, generate no clear electoral reward. These findings point to an asymmetry between the political consequences of visible losses and more diffuse gains. Paper 4 investigates how citizens attribute responsibility for educational outcomes to local politicians, school principals, private owners, and national policymakers. The survey experiment shows that private ownership shifts responsibility away from local politicians and toward private actors and, in some scenarios, national policymakers. This shift is substantially greater for blame associated with school closures than for credit associated with school openings. Although responsibility attribution and electoral accountability are empirically distinct, the findings together show how private provision can alter the political consequences of publicly funded education. Taken together, the results show that school-choice reforms affect not only educational outcomes and the organization of school markets but also political behavior and the perceived division of responsibility between public and private actors. How welfare services are organized therefore matters both for what those services produce and for how citizens understand the state and hold decision-makers to account.