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PublicationArticle (with peer review)

Stress Testing a Quasi-Market: Unintended Consequences of the Swedish School Voucher System

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Abstract

Quasi-markets are increasingly used in public service provision, yet they remain highly contested. This paper develops a conceptual framework grounded in economic theory to examine how quasi-markets differ from traditional markets along five key dimensions: (1) revenues, costs, and profits, (2) the matching of supply and demand, (3) competition, (4) structural change, and (5) rent-seeking. Assuming profit-maximizing behavior, we stresstest the quasi-market model to explore how these structural differences shape incentives and influence outcomes. Applying the framework to Sweden’s school voucher system, we show that specific design features have led to unintended consequences that undermine service quality and conflict with the reform’s stated policy goals.

Bergh, A., & Wernberg, J. (2025). Stress testing a quasi-market: Unintended consequences of the Swedish school voucher system. Scandinavian Journal of Public Administration. https://doi.org/10.58235/sjpa.39316

Details

Author
Bergh, A., & Wernberg, J.
Publication year
2025
Published in

Scandinavian Journal of Public Administration.

Related

  • Ph.D.

    Joakim Wernberg

    joakim.wernberg@ratio.se

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Working paper

Working Paper No. 330: Work Environment and Competition in Swedish Schools, 1999-2011

Sebhatu, A., Wennberg, K., Lakomaa, E. & Brandén, M.
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Publication year

2020

Published in

Ratio Working Paper

Abstract

Research on schools’ work environment highlights socioeconomic conditions (SES) as primary drivers of work environment, but evidence to date is primarily limited to cross-sectional samples. Research on school competition has revealed important effects on educational outcomes, but effects on work environment are largely unknown. We bridge these literatures by studying the work environment in all Swedish junior high schools and high schools using detailed data on complaints and incidences of disorder, including violence. Comparing educational levels to gauge differences in degree of choice made possible by competition, we overall find more adverse work environment in junior high schools facing stronger school competition and with many low-SES students in either the school or the region. Conversely, we find better work environment in high schools facing stronger school competition, and in high schools with a large share of students with foreign background. To assess causal effects of competition on work environment we compare regions that introduced competition versus those that have not in a difference-in-difference framework. In such regions only complaints in high schools decrease after competition is introduced. We highlight the importance of including multiple measures of both competition and work environment.

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