Competitive Effects of Means-Tested School Vouchers

Voucher options like tuition tax credit-funded scholarship programs have become increasingly popular in recent years. This study examines the effects of private school competition on public school students’ test scores in the wake of Florida’s Corporate Tax Credit Scholarship (FTC) program which offered scholarships to eligible low-income students to attend private schools. The authors examine whether students in schools exposed to a more competitive private school landscape saw greater improvements in their students’ test scores after the introduction of the program, than did students in schools that faced less competition. Students in public schools faced with increased private school competition showed greater gains in test scores than students in other public schools with the introduction of the program. These findings are not an artifact of pre-policy trends; the degree of competition from nearby private schools matters only after the announcement of the new program, which makes nearby private competitors more affordable for eligible students. The gains appear to be much more pronounced in the schools most at risk of losing students and in the schools that are on the margin of Title I funding.