Does Regulation Reduce Specialization? Examining the Impact of Regulations on Private Schools of Choice in Five Locations. Working Paper 2019-1

Private school choice options are being proposed and adopted in numerous states across the country. As of the spring of 2019, 62 private school choice programs were in operation in 29 states and the District of Columbia, serving more than 400,000 children. Although growth in private school choice programs and enrollment has been considerable over the past decade, the percentage of private schools participating in school choice options varies considerably by program. Understanding how program design impacts the supply of private schools participating in these programs will be critical for policymakers as they work to create and expand education choice options for families. This report considers whether certain regulations governing school choice programs reduce specialization and diversity in the supply of private schools that participate. Expanding on the prior analysis of the impact of regulations in three locations, the authors chart how schools self-identify prior to and after switching into private school choice program environments in each of the five locations. The authors found that private school leaders in all five locations are more likely to classify their schools as less specialized than they were prior to entering the programs. The authors also found evidence to suggest that more homogenization occurred in more highly regulated voucher programs. These findings suggest a potential homogenizing effect of regulations on school supply, limiting the diversity of the private school market. These findings also suggest policymakers should carefully weigh the costs of regulating private school choice programs, as overregulation could reduce specialization and diversity of school supply in a given school choice program, limiting the options that are available to families.