The expansion of private school choice programs has been accompanied by a growing call for their regulation.
Because voucher-using families use public education dollars that would have otherwise gone to government schools, officials are often highly concerned about quality. But could overregulation be trapping poor kids in bad schools?
A new Cato Institute study empirically examine school-level data from two of the most highly regulated voucher programs in the United States, the Milwaukee Parental Choice Program (MPCP) and the Ohio Educational Choice Scholarship Program (EdChoice), to determine the quality of schools participating in regulated voucher programs.
Using tuition, enrollment, and customer review scores from the website GreatSchools (an online non-profit that reviews schools) as proxies for school quality, the authors find strong evidence suggesting that lower-quality private schools are indeed more likely to participate in voucher programs than higher-quality schools in both locations. Deregulating these programs and expanding other school choice programs would prove much more beneficial to all.
Voucher regulations are created with the good intention of protecting vulnerable families, but an unintended consequence is increased cost to participating schools. Private schools must make a cost-benefit decision when determining whether to participate in a given voucher program. The benefit is the additional voucher funding while the cost is mainly additional program regulations. These regulations vary by program, but can include random-based admissions, teacher and administrator certification requirements, prohibition of parental copayment, standardized testing, requiring schools to allow students to opt out of religious programs, and additional paperwork.
In Milwaukee, schools with higher tuition levels are significantly less likely to participate in MPCP. Specifically, a $1,000 increase in private school tuition is associated with a 2.3 percentage-point (3 percent) lower likelihood of participation in the program. Additionally, the authors find evidence that a one-point increase in a GreatSchools review score is associated with an 11.4 percentage-point (14.8 percent) reduction in the likelihood of program participation.
Similarly, in Ohio a $1,000 increase in private school tuition is associated with a 2.8 percentage-point (3.8 percent) lower likelihood of participating in the EdChoice voucher program.
This evidence is significant and suggests that regulations deter high-quality private schools from participating in voucher programs in these localities. It would be wise for decisionmakers to reduce the costs of private school participation by deregulating these two programs and expanding policies that are less likely to be regulated, such as Education Savings Accounts or tax-credit scholarships.
Instead of trying to control the decisions that low-income families make regarding their children’s schools, policymakers ought to empower these families with the freedom to make educational decisions for their own kids. This additional freedom would lead to more options for the families that need them the most and a more educated society for all of us.