Do private schools improve public schools?

More evidence that competition can improve public school performance. A just released NBER working paper by David Figlio and Cassandra Hart (pdf here) examined the impact of private school competition on public school students’ test scores based on the experience of Florida’s Tax Credit Scholarship program (FTC) which offered scholarships (through vouchers) to eligible low-income students to attend private schools.

It offered assistance to students with family incomes below 185% of the federal poverty line to attend private religious or non-religious schools in Florida. The vouchers cover only part of the costs of attending private schools, and parents were free to send their children to any private school regardless of the share of tuition and fees covered by the voucher. They explored 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 and found

"...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... 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... Both greater ease of access to private school options (measured by the distance and density measures) and the variety of options that students have in terms of the religious (or secular) affiliations of private schools (measured by the diversity and concentration index measures) are positively associated with public school students’ test scores following the introduction of the FTC policy."

The flip-side to this finding may be that it may have a more nuanced relevance to countries like India because this study is set in an environment where state funds are tied to student enrollment and losing students to private schools therefore constitutes a financial loss (and even a possible closure by merger with a nearby school if the strength declines precipitously). In countries like India this fear may have no deterrent effect since even if schools lose students (so much so that they have to close down), teachers cannot be fired. In such environments, as this and this posts have explored, such competition may end up further impoverishing government schools.