Sweden’s government-funded voucher program began in 1992.  The Swedish voucher system allows any religious, non-profit, cooperative, or for-profit corporation to operate a school, but it must obtain approval from the Swedish National Agency for Education (NAE) to do so.  All families are eligible.  The school may not select students or charge tuition and fees in excess of the voucher amount.  Despite these baseline regulations, independent schools have a great deal of autonomy.

In “Independent Schools and Long-Run Educational Outcomes: Evidence from Sweden’s Large Scale Voucher Reform” (Institute for the Study of Labor, June 2012), researchers Anders Böhlmark and Mikael Lindahl examined the performance of students who used vouchers to attend one of the nearly 400 independent schools in Sweden.

Here is what Böhlmark and Lindahl found:

School choice raised student performance regardless of student demographics. “We find that an increase in the share of independent-school students has caused an increase in average educational performance. This increase is evident for both short- and long-run measures and the estimates remain very similar if we control for changes in a number of demographic, family background and municipality-level characteristics.”

The findings were not biased by pre-voucher trends in student performance. “We also find that these positive effects are not driven by differential pre-reform trends in educational outcomes and that they are very robust to a number of other issues that might bias the estimates (such as grade inflation and the increased choice opportunities between public schools).”

Competition is key. “Interestingly, it appears that the positive effects are primarily due to external effects (e.g., spill-over or competition effects) and not that independent-school students gain significantly more than public school students.”

Student achievement increased, educational expenditures did not.  “We are also able to show that a higher share of independent-school students in the municipality has not generated increased school expenditures. Hence, our positive educational performance effects are interpretable as positive effects on school productivity.”

Be patient.  It takes time for school choice reforms to begin working.  “However, for most measures, we do not detect positive and statistically significant educational performance effects until approximately a decade after the reform. This time lapse is notable, but not surprising since it has taken time for independent schools to become more than a marginal phenomenon in Sweden.”

By the way, independent school market share is around 11 percent.