With the debate about the future of the welfare state in full
swing, proposals to replace various government human-service
programs with vouchers have suddenly taken center stage in the
policy arena. The White House has proposed converting most of
the money spent on federal-housing and job-training programs
into vouchers. Conservatives—longtime champions of vouchers for
education and low-income housing—have recently proposed vouchers
for Medicaid, Medicare and veterans' health care. While interest
in vouchers is growing, little work has been done to
systematically study the potential benefits and pitfalls of this
approach. A close examination of three relatively long-running
human-service voucher programs—food stamps and housing vouchers
in the United States and nursing home vouchers in the United
Kingdom—helps to shed light on the possible effects of replacing
social service programs with vouchers. The experience with these
programs demonstrates that vouchers have numerous advantages
over either direct gover