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Where does voucher funding go? How large-scale subsidy programs affect private-school revenue, enrollment, and prices

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  • Hungerman, Daniel M.
  • Rinz, Kevin

Abstract

Using a new dataset constructed from nonprofit tax-returns, this paper explores how vouchers and other large-scale programs subsidizing private school attendance have affected the fiscal outcomes of private schools and the affordability of a private education. We find that subsidy programs created a large transfer of public funding to private schools, suggesting that every dollar of funding increased revenue by a dollar or more. Turning to the incidence of subsidies and the impact of subsidies on enrollment, our findings depend on the type of program introduced: programs that restrict eligibility to certain groups of students create large enrollment gains but no change in price, while programs that offer unrestricted subsidies lead to price increases but no change in enrollment. We calculate elasticities of demand and supply for private schools, and discuss welfare effects.

Suggested Citation

  • Hungerman, Daniel M. & Rinz, Kevin, 2016. "Where does voucher funding go? How large-scale subsidy programs affect private-school revenue, enrollment, and prices," Journal of Public Economics, Elsevier, vol. 136(C), pages 62-85.
    • Handle: RePEc:eee:pubeco:v:136:y:2016:i:c:p:62-85
    DOI: 10.1016/j.jpubeco.2016.03.003
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    Cited by:

    1. Crystal Zhan, 2018. "School Choice Programs And Location Choices Of Private Schools," Economic Inquiry, Western Economic Association International, vol. 56(3), pages 1622-1645, July.
    2. Cohn, Ricardo Meilman, 2020. "Effects of public-school choice on private schools: Evidence from open enrollment reform," CLEF Working Paper Series 23, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    3. Shen Ying, 2021. "The Effects of the State Prepaid Tuition Program on College Attainment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 21(1), pages 307-334, January.
    4. Daniel M. Hungerman & Kevin Rinz & Jay Frymark, 2019. "Beyond the Classroom: The Implications of School Vouchers for Church Finances," The Review of Economics and Statistics, MIT Press, vol. 101(4), pages 588-601, October.

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    More about this item

    Keywords

    School choice; Education; Vouchers;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • I2 - Health, Education, and Welfare - - Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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