Economics

Education is a rivalrous good. That means that only one person can enjoy each education spot. If there are twenty places for students in a class and the quality of teaching isn't compromised, students can only be aggregated if only a limited number are taken. It is also an excludable good, because someone can easily be prevented from attending classes offered. With such characteristcs, education can be classified as a private good, which are, according to economic theory, usually better provided by the market than by the government. But education is a service that contains several positive externalities, which is why the government chooses to fund it.

A minority of voucher opponents in the U.S. object on radically different grounds from the above mentioned. These opponents believe that granting government money, even indirectly, to private and religious schools will inevitably lead to increased governmental control over non-government education. Individuals who oppose vouchers on these grounds are often libertarian; a few of them go so far as to call for the abolition of all government sponsorship of education in the U.S. The Alliance for the Separation of School & State opposes education vouchers on the grounds that "if vouchers become commonplace, private and religious schools will become more and more like public schools" Other libertarians, such as Milton Friedman, fully support school vouchers, though his plan assumes no additional regulation of private schools.

In addition, economists point to the theoretical (but unproven) problem of "cream skimming," a variety of adverse selection in the educational market. With a presumably greater pool of applicants, the private schools will be more selective over which students to admit, possibly excluding those who belong to the "wrong" religion or ethnicity, those with disabilities such as autism or multiple sclerosis and those with disciplinary problems. On the other hand, by law the public schools have to educate everyone, so that they become a "dumping ground" for those students unwanted by the private schools. This further undermines the reputation of the public schools, leading to a vicious circle that tends toward the total abolition of the public schools and the end of universal education. However, logic dictates that private schools may spring up to meet the demand of those empowered by school choice and thus negate this possible disaster.

Often, the low costs of the private schools benefiting from voucher funds arises from the non-union status of their staffs and their limited overhead because of their exemption from laws protecting those with disabilities and the like. Government regulations aimed at making the private schools act like "good citizens" threaten to make them be exactly like the public schools.