Aysha Akram

Professor Jasir Shahbaz

Economics of Education

11th April 2023

School Voucher scheme in Swedish Context

Sweden is located in the northern part of Europe which is known as “Scandinavia” by the rest of

the world. With a decentralized education system, Sweden has one of the highest public

expenditures on education, which is motivated by ambitious goals and learning outcomes

outlined by the central government(See Figure 6 and 7).The “uniquely liberal” coupon system in

Sweden in 1992 has only competitive rivalry from the Chilean coupon system(Vlachos ). In any

case, this initiative created one of the most “liberal public education systems in the world”

which is far more extensive than the limited state-level voucher programs in the United States"

(Klitgaard 2008).Before 1990s, Sweden had a limited number of independent schools and most

students attended public schools. However, with the help of municipalities and a robust system

of governance , they turned the figures around overnight.

The main objective of this paper is to find out how the results achieved in Sweden differ from the

proposed outcomes.On the surface, it seems Sweden has outdone its goals.As a recent study on

the impact of school voucher scheme on educational outcomes found that expansion in school

choice not only improved student productivity in compulsory education, it also improved
Swedish standardized test performance as well(Lindbom).However, these outcomes are only a

facade and researchers raised concerns on grade inflation downfall in Swedish test performance

on international level.Grade Inflation is a negative externality in terms of basic human gains , as

it is thought to negatively impact the acquisition of knowledge, one of the basic commodities an

individual needs to succeed(Sandstorm). Conversely, negative externalities are the outcome of

gradual institutional decay(Valacke and Gustafsson). Almost 25 years after its introduction, the

Swedish voucher system has problematic aspects that need to be taken into account for future

policy implications.Thus, by answering these questions, this study also contributes to a recent

review of the success of notable educational Sweden voucher initiatives which has quite

'matured' by now( Dynarski 2016).

Contrary to the nationwide imaginations, the voucher scheme in Sweden has not brought any

“dramatic changes” in the education demographics. In the second half of 1990s, the number of

students in primary school increased dramatically, complemented by the increase in independent

schools(Lindbom).From 89 during the 1991–1992 academic year to 238 during the 1995–1996

academic year, the number of these institutions has more than doubled over this time.Voucher

reform has significantly increased the number of private schools and the percentage of total

enrollment. In 1992/93, there were 106 private schools and 4,442 community schools, while

municipal schools at primary and secondary level decreased by 13.3%.

At the upper secondary level, in 1992/93 there were 57 private schools and 444 public school run

by local governments. In 2011/12 there were 499 private schools and 506 public schools.
private schools increased by almost 800% and public schools by 12.3%. We can see that the

number of private schools has surged as a result of the voucher reform.(Sahlgreen) However,

overall in recent years, the numbers of students attending these schools have fallen down as in

the year of 2008-09, only 10 % of the children(of compulsory school age) attended these

financed schools(Chubb 2007).However, the overall enrollment at these institutions rose from

7,337 to 20,247 students. In other words, there hasn't been much growth when compared to

overall enrollments across the country(“In Sweden / Free Choice and Vouchers Transform

Schools”).

The schools differ in the amount of funding they receive from governments.On an average,

private primary schools receive an average amount of 4212 dollars from the government whereas

for lower and upper secondary schools, this amount averages around 6011 and 5722 dollars

respectively(See Figure 3,4,5 and 6).When the reform was passed, funding per student was

around 85 percent which is 100 percent as per now(excluding international

students).Municipalities are asked to distribute funds entirely on per student basis without any

exceptions.However, the municipalities may still deviate from the law where some independent

schools get more or less funding depending on the student composition in school(Sahlgreen)

Studying from 1992 to 2013, average school government expenditure on Swedish schools has

increased approximately, accounting for CPI. Does that mean that voucher schemes increase

government expenditure? No, not necessarily as it is more dependent on how Swedish politicians

allocate resources in the annual budget and less dependent on the 100 percent municipality

average funding per student.When it comes to studying the impact of the availability of school
choice on student productivity, the results are ambiguous. Different studies point towards

declining GPAs and decreased performance in PISA tests of Swedish students over time(See

figure 6 and 7).But it will not be justified to blame this fall on voucher schemes as the downfall

started already in the 1980s and it may or may not be greater without them. As students of

economics, we know that correlation does not equal causation(Dovemark and Arreman).

The school voucher experiment in Sweden suggests that these schemes mostly fail at what they

claim to achieve even under the most “democratic” conditions as in Sweden, put forward by

advocates with the most transparent intentions.It seems that the mushroom growth in private

schools in Sweden has only satisfied a small minority of parents who belonged from well-off

families in urban cities.The children of less well-off parents don't seem to get any benefit at all as

mostly “independent schools” giving good results are mostly located in geographical areas suited

for elites.Research suggests us that there is no concrete evidence on the independent schools

being more productive and cost efficient than the public schools.Vouchers may be effective

solutions for some populations in other countries, however, our research suggests that they are

not universal solutions and studies shown that their effectiveness is limited.They may be

workable in smaller markets with secure transportation and other infrastructure, unlike in

Sweden.However, the voucher scheme can be made more “effective” by focusing on regulated

fee structure and admission criteria in Swedish schools.

Word count : 1267 words.
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