Competitive Effects of Means-Tested School Vouchers

We study the effects of private school competition on public school students' test scores in the wake of Florida's Corporate Tax Credit Scholarship program, now known as the Florida Tax Credit Scholarship Program, which offered scholarships to eligible low-income students to attend private schools. Specifically, we examine whether students in schools that were exposed to a more competitive private school landscape saw greater improvements in their test scores after the introduction of the scholarship program, than did students in schools that faced less competition. The degree of competition is characterized by several geocoded variables that capture students' ease of access to private schools, and the variety of nearby private school options open to students. We find that greater degrees of competition are associated with greater improvements in students' test scores following the introduction of the program; these findings are robust to the different variables we use to define competition. 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. We also test for several moderating factors, and find that schools that we would expect to be most sensitive to competitive pressure see larger improvements in their test scores as a result of increased competition.