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Epple and Romano (2002) describe theoretical evidence that school vouchers will lead to "cream-skimming," where private schools will pick off the better students and leave public schools with lower-ability average students. They propose targeted vouchers, in which different-sized vouchers go to different groups of students, to combat this potential concern.

How would you design a targeted voucher system that would lead to a reduced level of cream-skimming?

Financial Management, Finance

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