“Majority Voting and Means-Tested Vouchers” by Gerhard GLOMM
University of North Carolina at Greensboro
University of Iowa
We develop a model of publicly funded means-tested education vouchers. In this model, the voucher received by each household is a decreasing function of household income. We prove the existence of a sequential majority voting equilibrium where households vote over both the level of public provision and the extent of means testing. In a setting calibrated to match characteristics of U.S. education data, we find that the means-tested voucher regime is majority preferred to the status quo mixed public-private regime, whereas a uniform voucher is not. We show that our results are robust to changes in preference parameters, income distribution and assumptions about voter turnout.