The Effect of Private School Competition on Public School Performance. Occasional Paper.

This paper is a report of a study that investigated whether increased private-school competition results in enhanced performance of public schools. Data for the study came from a pooled data set from Georgia Department of Education documents and directories, which included socioeconomic data on students and test scores from Georgia school systems between 1980 and 1990 for 3rd-grade and 10th-grade reading and math tests. The data allowed researchers to address directly the problem of endogeneity. Following an introduction, the report presents a framework of how private competition can affect public-school performance and investigates the conditions for a beneficial competitive effect. The next section explains the empirical models and details the data used in the analysis. The next section presents the empirical results. The empirical results do not lend support to the hypothesis that private-school competition improves public-school performance, as measured by student-exam results. Supplementing the text are five tables that detail test scores and socioeconomic data. (Contains 23 references.) (WFA)