Do Vouchers Lead to Sorting under Random Private School Selection?
) Public Economics from EconWPA Abstract: This paper analyzes the impact of voucher design on student sorting, and more specifically investigates whether there are feasible ways of designing vouchers that can reduce or eliminate student sorting. It studies these questions in the context of the first five years of the Milwaukee voucher program. Much of the existing literature investigates the question of sorting where private schools can screen students. However, the publicly funded U.S. voucher programs require private schools to accept all students unless oversubscribed and to pick students randomly if oversubscribed. This paper focuses on two crucial features of the Milwaukee voucher program – random private school selection and the absence of topping up of vouchers. In the context of a theoretical model, it argues that random private school selection alone cannot prevent student sorting. However, random private school selection coupled with the absence of topping up can preclude sor
