Competition improves public schools

Threatened with losing students to private schools, Florida public schools improved, concludes a Northwestern study by David Figlio and Cassandra Hart.

Starting in 2002, the Florida Tax Credit Scholarship Program (FTC) has provided funding to help low-income parents pay for private school.  Corporations donate money to fund the scholarships in exchange for a tax credit.

The scholarship is quite generous; it covers approximately 90 percent of tuition and fees at a typical religious elementary school in Florida and two-thirds of tuition and fees at a typical religious high school. As a result, the program greatly increased the accessibility of private schools to low-income families. In the first year, some 15,585 scholarships were awarded, increasing the number of low-income students attending private schools by more than 50 percent. For the 2009–10 school year, the FTC program awarded scholarships to 28,927 students.

Public schools located near private schools increased reading and math scores more than public schools that had little competition.

For every 1.1 miles closer to the nearest private school, public school math and reading performance increases by 1.5 percent of a standard deviation in the first year following the announcement of the scholarship program. Likewise, having 12 additional private schools nearby boosts public school test scores by almost 3 percent of a standard deviation. The presence of two additional types of private schools nearby raises test scores by about 2 percent of a standard deviation. Finally, an increase of one standard deviation in the concentration of private schools nearby is associated with an increase of about 1 percent of a standard deviation in test scores.

Test scores rose more for elementary and middle schools than for high schools, perhaps because the scholarship made K-8 private schools affordable but didn’t cover as much of the tuition at private high schools.

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