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

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Author Info
Rajashri Chakrabarti

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

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This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. C. F. Manski, . "Educational choice (vouchers) and social mobility," Institute for Research on Poverty Discussion Papers 972-92, University of Wisconsin Institute for Research on Poverty.
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  2. 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. [Downloadable!]
  3. 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. [Downloadable!] (restricted)
  4. 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. [Downloadable!] (restricted)
  5. McMillan, Robert, 2004. "Competition, incentives, and public school productivity," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1871-1892, August. [Downloadable!] (restricted)
  6. Brian A. Jacob & Lars Lefgren, 2002. "Remedial Education and Student Achievement: A Regression-Discontinuity Analysis," NBER Working Papers 8918, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  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. [Downloadable!] (restricted)
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  8. Hoyt, William H. & Lee, Kangoh, 1998. "Educational vouchers, welfare effects, and voting," Journal of Public Economics, Elsevier, vol. 69(2), pages 211-228, June. [Downloadable!] (restricted)
  9. Figlio, David N. & Rouse, Cecilia Elena, 2006. "Do accountability and voucher threats improve low-performing schools?," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 239-255, January. [Downloadable!] (restricted)
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  10. 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. [Downloadable!] (restricted)
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  11. Thomas J. Nechyba, 2000. "Mobility, Targeting, and Private-School Vouchers," American Economic Review, American Economic Association, vol. 90(1), pages 130-146, March. [Downloadable!] (restricted)
  12. 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. [Downloadable!] (restricted)
  13. 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. [Downloadable!] (restricted)
  14. Z. Chen & Edwin G. West, 1998. "Selective Versus Universal Vouchers: Modelling Median Voter Preferences in Education," Carleton Economic Papers 98-02, Carleton University, Department of Economics. [Downloadable!]
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  15. 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. [Downloadable!] (restricted)
  16. Rajashri Chakrabarti, 2005. "Can Increasing Private School Participation and Monetary Loss in a Voucher Program Affect Public School Performance? Evidence from Milwaukee," Public Economics 0512003, EconWPA. [Downloadable!]
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  17. 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. [Downloadable!]
  18. 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. [Downloadable!] (restricted)
  19. Dennis Epple & Richard Romano, 2002. "Educational Vouchers and Cream Skimming," NBER Working Papers 9354, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  20. Nechyba, Thomas J., 2002. "Introducing School Choice into Multi-District Public School Systems," Working Papers 02-13, Duke University, Department of Economics. [Downloadable!]
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  21. Eric A. Hanushek & Margaret E. Raymond, 2002. "Improving educational quality: how best to evaluate our schools," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, issue Jun, pages 193-247. [Downloadable!]
  22. Rajashri Chakrabarti, 2005. "Do Vouchers Lead to Sorting under Random Private School Selection? Evidence from the Milwaukee Voucher Program," Public Economics 0512004, EconWPA. [Downloadable!]
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  23. 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.
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Rajashri Chakrabarti, 2007. "Vouchers, public school response, and the role of incentives: evidence from Florida," Staff Reports 306, Federal Reserve Bank of New York. [Downloadable!]
    Other versions:
  2. Rajashri Chakrabarti, 2005. "Can Increasing Private School Participation and Monetary Loss in a Voucher Program Affect Public School Performance? Evidence from Milwaukee," Public Economics 0512003, EconWPA. [Downloadable!]
    Other versions:
  3. 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. [Downloadable!]
  4. Steven G. Craig & Scott Imberman & Adam Perdue, 2009. "Does It Pay To Get An A? School Resource Allocations In Response To Accountability Ratings," Working Papers 2009-04, Department of Economics, University of Houston. [Downloadable!]
  5. 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. [Downloadable!] (restricted)
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