IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Do vouchers lead to sorting under random private-school selection? Evidence from the Milwaukee voucher program

  • Rajashri Chakrabarti

This paper analyzes the effect of school vouchers on student sorting--defined as a flight to private schools by high-income and committed public-school students--and whether vouchers can be designed to reduce or eliminate it. Much of the existing literature investigates sorting in cases where private schools can screen students. However, publicly funded U.S. voucher programs require a private school to accept all students unless it is oversubscribed and to pick students randomly if it is oversubscribed. This paper focuses on two crucial requirements of the Milwaukee voucher program: 1) private schools must select students randomly and 2) private schools must accept the voucher amount as full tuition payment (that is, "topping up" of vouchers is not permitted). Using a theoretical model, this study argues that random selection alone cannot prevent student sorting. However, random selection together with the absence of topping up can preclude sorting by income, although there is still sorting by ability. Sorting by ability is not caused here by private-school selection, but rather by parental self-selection. Using a logit model and student-level data from the first five years of the Milwaukee voucher program, 1990-94, this study establishes that random selection has indeed taken place, providing an appropriate setting for testing the corresponding theoretical predictions in the data. Next, using several alternative logit specifications, it demonstrates that these predications are validated empirically. These findings appear to have important policy implications.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

File URL:
Download Restriction: no

Paper provided by Federal Reserve Bank of New York in its series Staff Reports with number 379.

in new window

Date of creation: 2009
Date of revision:
Handle: RePEc:fip:fednsr:379
Contact details of provider: Postal: 33 Liberty Street, New York, NY 10045-0001
Web page:

More information through EDIRC

Order Information: Web: Email:

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.:

as in new window
  1. Levin, Henry M., 1991. "The economics of educational choice," Economics of Education Review, Elsevier, vol. 10(2), pages 137-158, June.
  2. David E. Campbell & Martin R. West & Paul E. Peterson, 2005. "Participation in a national, means-tested school voucher program," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 24(3), pages 523-541.
  3. Dennis Epple & Richard Romano & Holger Sieg, . "Admission, Tuition, and Financial Aid Policies in the Market for Higher Education," GSIA Working Papers 2003-04, Carnegie Mellon University, Tepper School of Business.
  4. Levin, Henry M., 1992. "Market approaches to education: Vouchers and school choice," Economics of Education Review, Elsevier, vol. 11(4), pages 279-285, December.
  5. Dennis Epple & Richard Romano, 2002. "Educational Vouchers and Cream Skimming," NBER Working Papers 9354, National Bureau of Economic Research, Inc.
  6. 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.
  7. 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.
  8. Maria Marta Ferreyra, 2007. "Estimating the Effects of Private School Vouchers in Multidistrict Economies," American Economic Review, American Economic Association, vol. 97(3), pages 789-817, June.
  9. Eric J. Brunner & Jennifer Imazeki & Stephen L. Ross, 2010. "Universal Vouchers and Racial and Ethnic Segregation," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 912-927, November.
  10. Dennis Epple & David Figlio & Richard Romano, 2000. "Competition Between Private and Public Schools: Testing Stratification and Pricing Predictions," NBER Working Papers 7956, National Bureau of Economic Research, Inc.
  11. 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.
  12. Dalton Conley & Rebecca Glauber, 2006. "Parental Educational Investment and Children’s Academic Risk: Estimates of the Impact of Sibship Size and Birth Order from Exogenous Variation in Fertility," Journal of Human Resources, University of Wisconsin Press, vol. 41(4).
  13. William G. Howell, 2004. "Dynamic selection effects in means-tested, urban school voucher programs," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 23(2), pages 225-250.
  14. Hsieh, Chang-Tai & Urquiola, Miguel, 2006. "The effects of generalized school choice on achievement and stratification: Evidence from Chile's voucher program," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1477-1503, September.
  15. Holger Sieg & Dennis Epple & Richard Romano, 2003. "Peer effects, financial aid and selection of students into colleges and universities: an empirical analysis," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(5), pages 501-525.
  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. Henry M. Levin, 1998. "Educational vouchers: Effectiveness, choice, and costs," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 17(3), pages 373-392.
  18. Figlio, David & Hart, Cassandra M.D. & Metzger, Molly, 2010. "Who uses a means-tested scholarship, and what do they choose?," Economics of Education Review, Elsevier, vol. 29(2), pages 301-317, April.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:fip:fednsr:379. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Amy Farber)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.