Competitive Effects of Means-Tested School Vouchers

Brief

Competitive Effects of Means-Tested School Vouchers

Abstract

Voucher options like tuition tax credit-funded scholarship programs have become increasingly popular in recent years. This study examines the effects of private school competition on public school students' test scores in the wake of Florida's Corporate Tax Credit Scholarship program which offered scholarships to eligible low-income students to attend private schools. The authors examine whether students in schools exposed to a more competitive private school landscape saw greater improvement in their students' test scores after the introduction of the program, than did students in schools that faced less competition. Greater degrees of competition are associated with greater improvements in students' test scores following the introduction of the program. The findings are not an artifact of pre-policy trends; the degree of competition from nearby private schools matters only after the announcement of the new program, which makes nearby private competitors more affordable for eligible students. Also, schools that we would expect to be most sensitive to competitive pressure see larger improvements in their test scores as a result of increased competition.

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