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Competitive Effects of Means-Tested School Vouchers. David Figlio , Northwestern and NBER Cassandra Hart, Northwestern December 2009. Introduction. School choice options have become increasingly prevalent in recent years
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Competitive Effects of Means-Tested School Vouchers David Figlio, Northwestern and NBER Cassandra Hart, Northwestern December 2009
Introduction • School choice options have become increasingly prevalent in recent years • Considerable attention paid to potential competitive effects of choice, both positive (efficiency) and negative (cream-skimming) • Challenging to gauge competitive effects because of interrelationship between private school supply and public school performance • Prior literature: cross-sectional studies of private school penetration in US and international; Milwaukee vouchers; Florida school grades; Sweden voucher program introduction; Chile voucher cross-section
This paper • Study introduction of large new school voucher program; use introduction of this program as source of plausibly exogenous variation that increased demand for private school options after 2001 • Look at quantity and variety of nearby private school options in year prior to program announcement, which could generate variation in access to the program • Florida is large and varied in its pre-program private school supply • Identifying off of a policy change; use student data from 99-00 through 06-07
How vouchers might affect public schools • Competition effect • Composition effect • Resource effect • First year of program was before any students left the public schools – but were applying • Work in progress: still trying to tease out three effects in the “mobility” years of the program
Florida’s Corporate Tax Credit Scholarship Program • Funded by fully tax creditable corporate contributions to one of three Scholarship Funding Organizations, each with geographic range; total contributions capped by Legislature • Began with 20,000+ students, now at 27,000+ students • Students below 185% of poverty line and attending public school in prior year (or entering grades K/1) eligible; renewal requires income below 200% of poverty line • Initial voucher was $3,500; now, it’s $3,950-$4,100 (around 90% of average “rack rate” religious school tuition/fees in Florida)
Private school landscape in Florida • 2000 Census 5% microdata sample: 11.4% of Florida students 6-17 attended private schools; 5.4% of income-eligible students attended private schools • Large regional variation in private school penetration at MSA level • Considerable within-MSA variation as well (wait a few slides)
Regional variation in private school penetration in 2000 Census
Data • (Standardized) student test scores, basic demographics from 1999-2000 through 2006-07 from Florida Education Data Warehouse • Developmental scale scores employed, grades 3-10 • Exclude students with disabilities (eligible for other voucher program, McKay Scholarships) • 9.8M student-year observations; 2.8M students • Private school universe from Florida Dept of Education • Public and private addresses geocoded using ARCGis • Private competitors measured by grade span served
Empirical approach • School and time fixed effect models (clustered SE) • Dependent variable: standardized student DSS test scores, controlling for prior-year test scores when available • Controls for student characteristics and grade • Policy variable: private school competition (measured in 2000) x post-policy • “Post-policy” occurs once program is announced • Other models look year-by-year after policy is announced
Competition measures • Physical distance in miles to nearest private school competitor (measured negative) • Number of private competitors within 5 miles • Number of types of private competitors within 5 miles • Types (self-identified by schools): non-religious; non-denominational; Catholic; Protestant; Evangelical; Baptist; Islamic; Jewish; “Christian”; other religious • Herfindahl index of competitor types (1-Herfindahl) • Robust to other radii of competition • Study sample: schools with competitor within 5 miles (basically the whole state)
Differences by context (reading; distance measure of competition)
Bigger differences in “mobility” years • Competition effect? • Resource effect? • Composition effect?
Where do students fall in their prior school’s distribution?
Where do students fall in their prior school’s distribution?
Summing up • Preliminary conclusions • Limitations/generalizability