Competitive Effects of Means-Tested School Vouchers

David N. Figlio and Cassandra M.D. Hart
National Bureau of Economic Research
June 2010

This NBER working paper adds to a long line of studies demonstrating that competition lifts all boats. It focuses on the Florida Tax Credit Scholarship Program—the largest such program in the country—which gives low-income students tuition stipends to attend private schools; nearly 28,000 students took advantage last year. The authors studied whether heightened competitive pressure from nearby private schools raised the quality of nearby public ones. What distinguishes this paper from its predecessors is how the authors isolated those competitive effects (from such contaminants as shifting school demographics): They paid particular attention to the year between when the program was signed into law (2001) and when it went into effect (school year 2002-03). During that time period, when students were applying for the program, but had not yet enrolled, the analysts found that the threat of increased competition led to statistically significant improvement in public school test scores. Unsurprisingly, this was particular true in schools with the most to lose—namely, those with more low-income students whose additional Title I funding would be lost if the student left for private school, and elementary and middle schools, where the voucher covered a larger percentage of (cheaper) elementary/middle private school tuition, than at the high school level. You can purchase the paper for a small fee here.

More By Author