Impact of Universal Private School Vouchers on Enrollment and Spending in Public Schools: Evidence from Arizona

• In Event: School Choice, Screening, and Stratification: Evidence on Enrollment and Composition

Abstract

The first wave of private school choice programs in the United States (1990 to mid-2010s) focused almost exclusively on children from low- and middle-income families or students with different abilities. But over the last ten years, boosted by key U.S. Supreme Court victories in support of public financing for private school vouchers, many states have passed legislation allowing for significantly expanded private school choice. This includes new or expanded universal programs across many states, including Arkansas, Arizona, Florida, Indiana, and Ohio, with many others following suit in the just concluded school year. This recent expansion of private school voucher programs, paid for by public money, has the potential to significantly alter the existing K-12 educational landscape in the country. However, there is no study so far which has undertaken to comprehensively document the policy impact, particularly at the disaggregated school district level. Our paper helps fill up an important gap in the literature. Arizona is a particularly instructive case study, as the state has been a frontrunner in the current wave of broad-based private school voucher programs. The state had instituted education savings accounts in 2011 - these were initially reserved for children with disabilities, but was later expanded to children of active-duty military members and to students in schools which received a D or F on state accountability report cards. Then, in 2022, state legislators expanded eligibility for private school vouchers to all K-12 students and removed the requirement of initial public school attendance. This resulted in a dramatic increase in the number of voucher students, with the figure climbing up steadily since the program was implemented. This study seeks to answer the following research questions:  How has the recent growth in eligibility for school vouchers in Arizona changed enrollment across the state’s public schools? How does this impact vary by locale, performance levels and student demographics of public schools? How have universal vouchers impacted existing trends in per pupil spending across Arizona’s public school districts? Did the institution of universal vouchers, enabling families to exit their local public schools (or to never enroll in local public schools to begin with), change taxpayer incentives with respect to supporting local K-12 education? We use longitudinal enrollment and finance data at the school district-level from multiple sources, including the fiscal F-33 files from the Common Core of Data, as well the American Community Surveys (ACS) as embodied in the EDGE (Education, Demographic and Geographic Estimates) portal. These help us portray a rich and nuanced portrait of trends in demographic and socioeconomic characteristics of school districts. Employing a two-way fixed effects (TWFE) model in an event-study framework, we document the short- and medium-run impacts of universal private school vouchers on student enrollment and spending in public schools. The findings have significant policy implications.

Author

• Joydeep Roy, New York City Independent Budget Office
  Presenting Author