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Impact of voucher design on public school performance: evidence from Florida and Milwaukee voucher programs

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  • Rajashri Chakrabarti

Abstract

This paper examines the impact of vouchers in general and voucher design in particular on public school performance. It argues that all voucher programs are not created equal. There are often fundamental differences in voucher designs that affect public school incentives differently and induce different responses from them. It analyzes two voucher programs in the United States. The 1990 Milwaukee experiment can be looked upon as a "voucher shock" program that suddenly made low-income students eligible for vouchers. The 1999 Florida program can be looked upon as a "threat of voucher" program, in which schools getting an "F" grade for the first time are exposed to the threat of vouchers, but do not face vouchers unless and until they get a second "F" within the next three years. In the context of a formal theoretical model, the study argues that the threatened public schools will unambiguously improve under the Florida-type program, and this improvement will exceed that under the Milwaukee-type program. Using school-level scores from Florida and Wisconsin and a difference-in-differences estimation strategy in trends, it then shows that these predictions are validated empirically. These findings are reasonably robust in that they survive sensitivity checks including correcting for mean reversion and a regression discontinuity analysis.

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Bibliographic Info

Paper provided by Federal Reserve Bank of New York in its series Staff Reports with number 315.

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Date of creation: 2008
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Handle: RePEc:fip:fednsr:315

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Keywords: Educational vouchers ; Education - Economic aspects ; Public schools;

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References

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  1. Dennis Epple & Richard Romano, 2002. "Educational Vouchers and Cream Skimming," NBER Working Papers 9354, National Bureau of Economic Research, Inc.
  2. Brian A. Jacob & Lars Lefgren, 2004. "Remedial Education and Student Achievement: A Regression-Discontinuity Analysis," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 226-244, February.
  3. McMillan, Robert, 2004. "Competition, incentives, and public school productivity," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1871-1892, August.
  4. Rajashri Chakrabarti, 2009. "Do vouchers lead to sorting under random private-school selection? Evidence from the Milwaukee voucher program," Staff Reports 379, Federal Reserve Bank of New York.
  5. Elizabeth M. Caucutt, 2002. "Educational Vouchers When There Are Peer Group Effects--Size Matters," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 195-222, February.
  6. Rajashri Chakrabarti, 2007. "Can increasing private school participation and monetary loss in a voucher program affect public school performance? Evidence from Milwaukee," Staff Reports 300, Federal Reserve Bank of New York.
  7. Kenneth Y. Chay & Patrick J. McEwan & Miguel Urquiola, 2003. "The Central Role of Noise in Evaluating Interventions that Use Test Scores to Rank Schools," NBER Working Papers 10118, National Bureau of Economic Research, Inc.
  8. Caroline Minter Hoxby, 2003. "School Choice and School Productivity. Could School Choice Be a Tide that Lifts All Boats?," NBER Chapters, in: The Economics of School Choice, pages 287-342 National Bureau of Economic Research, Inc.
  9. Caroline M. Hoxby, 2002. "School Choice and School Productivity (or Could School Choice be a Tide that Lifts All Boats?)," NBER Working Papers 8873, National Bureau of Economic Research, Inc.
  10. Edwin G. West & Zhiqi Chen, 2000. "Selective versus Universal Vouchers: Modelling Median Voter Preferences in Education," American Economic Review, American Economic Association, vol. 90(5), pages 1520-1534, December.
  11. David N. Figlio & Maurice E. Lucas, 2004. "What's in a Grade? School Report Cards and the Housing Market," American Economic Review, American Economic Association, vol. 94(3), pages 591-604, June.
  12. Thomas J. Nechyba, 2000. "Mobility, Targeting, and Private-School Vouchers," American Economic Review, American Economic Association, vol. 90(1), pages 130-146, March.
  13. Thomas J. Nechyba, 2003. "Introducing School Choice into Multidistrict Public School Systems," NBER Chapters, in: The Economics of School Choice, pages 145-194 National Bureau of Economic Research, Inc.
  14. Thomas J. Nechyba, 1996. "Public School Finance in a General Equilibrium Tiebout World: Equalization Programs, Peer Effects and Private School Vouchers," NBER Working Papers 5642, National Bureau of Economic Research, Inc.
  15. David N. Figlio & Cecilia Rouse, 2005. "Do Accountability and Voucher Threats Improve Low-Performing Schools?," NBER Working Papers 11597, National Bureau of Economic Research, Inc.
  16. Chang-Tai Hsieh & Miguel Urquiola, 2003. "When Schools Compete, How Do They Compete? An Assessment of Chile's Nationwide School Voucher Program," NBER Working Papers 10008, National Bureau of Economic Research, Inc.
  17. Manski, Charles F., 1992. "Educational choice (vouchers) and social mobility," Economics of Education Review, Elsevier, vol. 11(4), pages 351-369, December.
  18. Wilbert van der Klaauw, 2002. "Estimating the Effect of Financial Aid Offers on College Enrollment: A Regression-Discontinuity Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1249-1287, November.
  19. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-09, January.
  20. Hoyt, William H. & Lee, Kangoh, 1998. "Educational vouchers, welfare effects, and voting," Journal of Public Economics, Elsevier, vol. 69(2), pages 211-228, June.
  21. Joshua D. Angrist & Victor Lavy, 1999. "Using Maimonides' Rule To Estimate The Effect Of Class Size On Scholastic Achievement," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 533-575, May.
  22. Eric A. Hanushek & Margaret E. Raymond, 2002. "Improving educational quality: how best to evaluate our schools," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 47(Jun), pages 193-247.
  23. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
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Citations

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Cited by:
  1. Rajashri Chakrabarti, 2007. "Can increasing private school participation and monetary loss in a voucher program affect public school performance? Evidence from Milwaukee," Staff Reports 300, Federal Reserve Bank of New York.
  2. Ana Balcao Reis & Carmo Seabra & Luis C. Nunes, 2012. "Ranking schools: a step toward increased accountability or a mere discriminatory practice?," FEUNL Working Paper Series wp567, Universidade Nova de Lisboa, Faculdade de Economia.
  3. Ferreyra, Maria Marta & Liang, Pierre Jinghong, 2012. "Information asymmetry and equilibrium monitoring in education," Journal of Public Economics, Elsevier, vol. 96(1), pages 237-254.
  4. Rajashri Chakrabarti, 2011. "Vouchers, responses, and the test-taking population: regression discontinuity evidence from Florida," Staff Reports 486, Federal Reserve Bank of New York.
  5. Craig, Steven G. & Imberman, Scott A. & Perdue, Adam, 2013. "Does it pay to get an A? School resource allocations in response to accountability ratings," Journal of Urban Economics, Elsevier, vol. 73(1), pages 30-42.
  6. Rajashri Chakrabarti, 2007. "Vouchers, public school response, and the role of incentives: evidence from Florida," Staff Reports 306, Federal Reserve Bank of New York.
  7. Brian Gill & J.R. Lockwood III & Francisco Martorell & Claude Messan Setodji & Kevin Booker, 2009. "An Exploratory Analysis of Adequate Yearly Progress, Identification for Improvement, and Student Achievement in Two States and Three Cities," Mathematica Policy Research Reports 6360, Mathematica Policy Research.
  8. Chakrabarti, Rajashri, 2014. "Incentives and responses under No Child Left Behind: Credible threats and the role of competition," Journal of Public Economics, Elsevier, vol. 110(C), pages 124-146.
  9. Welsch, David M. & Zimmer, David M., 2012. "Do student migrations affect school performance? Evidence from Wisconsin's inter-district public school program," Economics of Education Review, Elsevier, vol. 31(1), pages 195-207.
  10. West, Martin R. & Peterson, Paul E., 2005. "The Efficacy of Choice Threats within School Accountability Systems: Results from Legislatively Induced Experiments," Working Paper Series rwp05-033, Harvard University, John F. Kennedy School of Government.
  11. Jonah E. Rockoff & Lesley J. Turner, 2008. "Short Run Impacts of Accountability on School Quality," NBER Working Papers 14564, National Bureau of Economic Research, Inc.
  12. Chiang, Hanley, 2009. "How accountability pressure on failing schools affects student achievement," Journal of Public Economics, Elsevier, vol. 93(9-10), pages 1045-1057, October.
  13. Rajashri Chakrabarti & Noah Schwartz, 2013. "Unintended consequences of school accountability policies: evidence from Florida and implications for New York," Economic Policy Review, Federal Reserve Bank of New York, issue May, pages 19-44.

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