The Unending Lithuanian Educational Reforms: Student Vouchers

Continuing the topic on Lithuania’s educational reforms from my last post, I will take a more detailed look at the student voucher policy for financing education in Lithuania. But first, some background on how the concept originated, what student vouchers are, and what are the pros and cons of the student voucher policy.


The origins of the student voucher idea can be traced back to 1792, when Thomas Paine, a British economist, proposed a “voucher scheme” – a special allowance of 4 pounds per year for each child up to the age of 14 – in order to finance education. The first education financing policy that most closely resembled student vouchers was implemented in the state of Vermont, in 1869. This policy allocated funding for rural families who wanted to send their kids to schools in other regions, essentially giving them school choice; a similar policy was adopted in Maine soon after, in 1873. Finally, the first one to define and describe the modern concept of student vouchers in detail was the American economist Milton Friedman, in his article on “The Role of Government in Education” in 1955. Even though the US is the biggest proponent of free market principles, and even though it has the two oldest student voucher policies in VT and MA, the policy is not widely implemented throughout the country today, with only 12 states employing a partial student voucher policy.


Despite the different definitions and implementations of student vouchers, the basic common premises behind the concept are the following:

  1. School choice – allowing parents, as the “true customers of the service of education”, to choose freely to which school to send their children.
  2. Competition between schools – introducing more effective implementation of funds, improving the quality of education, and creating a wider variety of educational options.
  3. Higher degree of parental involvement – increasing the personal interest of parents in the educational process and making them more responsible for their children.
  4. Better access to education for underprivileged and special-needs families.

The first two premises are highly influenced by free market principles, extending competition and efficiency to the realm of education. However, there are many criticisms of using economically based market principles in education, leading to controversy and debate.

Pros and Cons

The debate on student vouchers as an educational financing policy can be summarized in the list of pros and cons below.

Pros Cons
More effective allocation of funds in schools due to competition In the long term, only the popular schools benefit, while the least popular ones incur higher costs
Increased transparency of educational financing, due to the elimination of individualized subsidies and the need for lobbying Due to the need to attract as many students to a school, administrators and teachers are more willing to “give more slack” to underperforming students or even create fictitious students to maintain funding
Increased quality of education due to competition The intended increase of quality of education due to competition might backfire, especially when the options of schools to choose from are limited
Emergence of private schools and the ability of public schools to learn better practices from the private sector Underprivileged or special needs students might still not be able to choose better private schools due to their entrance requirements
Increased variety of schools in terms of informal education options Higher curricular freedom of private schools might undermine the national educational goals and strategies
School choice Increased social inequality
Increased response of school administrators to the needs and wishes of students and parents Any fluctuations in student numbers and, hence, funding, creates a feeling of instability and employment uncertainty for teachers
Higher parental involvement in the educational process of their children


The student voucher educational reform was introduced in Lithuania starting 2001, with a voucher of 1521 LTL (~570 USD) per student. This amount has more than doubled to 3800 LTL (~1430 USD) for the 2012-2013 school year; however, this does not reflect the dramatic decrease in the numbers of students in schools in the emigration-age of post-global-financial crisis and free migration within the EU.

The effects of the student voucher policy in Lithuania are seen to be more negative, or insignificant, than positive. The main critics of the policy are teachers and teachers unions, who experience chaotic and unstable working conditions with the decline in student numbers, especially in rural areas. In small towns and villages, there are not enough schools that could benefit from competition, causing the disappearance of small schools and firing of teachers.

Moreover, the actual distribution of student voucher funds is questioned, as school administrators use the funds not for professional teacher training, but for general expenses, such as remodeling facilities or paying utilities. The current main allocation of student voucher funds – 95% for teacher salaries – is also questioned, with some political attitudes to completely abolish the student voucher policy.

All in all, it is very important to consider the specific context of a country when trying to implement such policies as student vouchers. It is reassuring that the policymakers of Lithuania are aware of all the pros and cons of student vouchers and that a critical debate on the issue is present.

One thought on “The Unending Lithuanian Educational Reforms: Student Vouchers

  1. In concluding, you write that it is “very important to consider the specific context of a country when trying to implement such policies as student vouchers.” While you touch somewhat on the specifics of Lithuania — low student populations in rural areas, “unstable and chaotic” teacher working conditions — you don’t really get into it that much. I wonder if you could expand a bit on the specifics of Lithuania and what makes it a bad environment for vouchers…

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