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This paper analyzes households' response to the introduction of intra-district school choice and examines the impact of this choice on student test scores in Pinellas County Schools, one of the largest school districts in the United States. Households react strongly to the incentives created by such programs, leading to significant changes in the frequency of exercising alternative public schooling options, as well as changes in the composition of the "opt out" students. However, using proximity to public alternatives as an instrument for opting out of the assigned public school, the author finds no significant benefit of opting out on student achievement and that those who opt out of their default public schools often perform significantly worse on standardized tests than similar students who stay behind. The results further suggest that the short-run detrimental effects of opting out are stronger for students who opt out closer to the terminal grade of the school level. Yet the detrimental effects are weaker for disadvantaged students, who typically constitute the proposed target of school choice reforms.
Improving the quality of elementary and secondary education remains atop the political agenda in the United States, which annually spends roughly 1.5 times more money per pupil on primary and secondary education than the average member of the Organisation for Economic Co-operation and Development (OECD 2008). Yet, the additional resources allocated to education do not fully translate into higher student achievement: U.S. students perform worse than OECD averages on international tests in math, reading, and science (OECD 2003).
Increasing parental choice has been a leading theme of the educational policy implemented to enhance academic achievement in the United States during the past two decades. The main objective of such policies is to "level the playing field" in access to quality education for disadvantaged students who cannot otherwise afford the higher-quality schooling options. Along these lines, open enrollment programs such as interdistrict and intra-district school choice, which allow parents to send their children to public schools outside the neighborhoods in which they reside, have become increasingly popular. As of 2005, 27 states had passed legislation mandating school districts to implement intra-district school choice, and 20 states had adopted legislation mandating that school districts participate in the state's inter-district choice program (Economic Commission of the States 2005). There is also an increasing trend in the share of households participating in open enrollment programs. Between 1993 and 2003, the share of students attending a public school other than their neighborhood schools increased from 11 percent to 15.4 percent in the United States (National Center for Education Statistics 2006).
This study analyzes households' response to the introduction of public school choice in the form of open enrollment in Pinellas County Schools (PCS), one of the largest school districts in the United States, and examines the impact of exercising this form of school choice on student test scores. Having abandoned the zoning regime with court-ordered busing, which had been used to prevent racial segregation for more than three decades, and implemented intra-district school choice in 2003, PCS provides an appealing case to analyze the impact of increased educational opportunities on households' school choice behavior.
Based on results from the entire elementary- and middle-school student population attending 4th through 8th grades between 2001 and 2005 in PCS, households reacted strongly to the incentives created by the open enrollment program, leading to significant increases in the rate of students who opted out of their default schools. Among the transition-grade students (6th graders who transitioned from elementary school to middle school at the beginning of the school year), open enrollment increased the share of students who opted out of their default middle school from 8 percent to 33 percent; for non-transition-grade students, the opt-out rate increased from 7 percent to 16 percent in the year following policy adoption. The findings also reveal significant changes in the composition of opt-out students following the policy change. The policy change, by reducing the implicit cost of opting out for students, "smoothed-out" the prior achievement levels of the traveling students, attracting more mediocre students to opting out.
Having established that households responded to the incentives created by the open enrollment program, I then examine the impact of exercising this form of school choice on test scores. By expanding the feasible public schools available to each household, open enrollment programs might enhance student achievement in two ways. First, students who cannot otherwise afford higher-quality schooling options might be able to attend higher-quality public schools or schools that better match their interests and needs under the open enrollment regime. Second, if the increasing competition among public schools improves the efficiency of the public provision of education, open enrollment programs will enhance student achievement by increasing the overall quality of public education. How strongly open enrollment improves student achievement relies on households' willingness and ability to send their children to higher-quality public schools in the presence of open enrollment.
However, testing these predictions has proven difficult because opting out is highly selective. In other words, if those who opt out of their default public schools differ from their peers who stay behind along unobservable characteristics such as intrinsic motivation to excel, a traditional ordinary least-squares approach fails to provide unbiased estimates of the causal relationship between opting out and student achievement. A recent body of research uses randomized lotteries, which are commonly employed by school districts and schools to determine the assignments in oversubscribed public schools, to deal with this issue. Comparing the student outcomes between the lottery-winners and lottery-losers, these studies typically find no significant benefit of attending selective public schools on student test scores. However, these estimates will not necessarily reflect the true impact of exercising the school choice provided by open enrollment on student outcomes for the entire student body if those who participate in lotteries differ from the entire student population.
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