The Ripple Effect: How Private-School Choice Programs Boost Competition and Benefit Public-School Students

Advocates for taxpayer-funded school-choice programs cite the potential of market competition to spur educational improvement and promote equity for low-income students. Meanwhile, school-choice critics lament the exodus of talent and resources from public schools, which they argue such programs necessarily cause. Most research on publicly funded voucher or scholarship programs, which use tax dollars to help low-income students attend private schools, examines their effects on voucher recipients. What the researchers wanted to know is how market pressure affects the performance of local public schools over the long run. As a private-school choice program grows, how does increased competition affect educational outcomes for public-school students who don't use scholarships or vouchers? The authors examine these questions based on a rich dataset from the state of Florida, where a tax-credit scholarship program for low-income students has been operating since 2002. The authors constructed an index of competitive pressure to measure the degree of market competition each student's school faced prior to the program's start. The analysis then looks at whether non-scholarship students experience negative effects, either in terms of their scores on reading and math tests or their rates of absenteeism and suspensions, based on this pre-program market pressure and the expansion of the program over time. The authors find broad and growing benefits for students at local public schools as the school-choice program scales up. In particular, students who attend neighborhood schools with higher levels of market competition have lower rates of suspensions and absences and higher test scores in reading and math. And while the analysis reveals gains for virtually all students, the authors find that those most positively affected are students with the greatest barriers to school success, including those with low family incomes and less-educated mothers.