New Reseach Shows Positive Impacts of School Competition on Students Remaining in Traditional Schools

Posted 24 January 2011 by

Researchers with Northwestern University and the National Bureau of Economic Research have found that Florida’s tax-credit scholarship program (which uses tax-deductible private donations to fund scholarships enabling students at failing schools to attend private schools) yielded competition that improved the performance of traditional schools and the academic achievement of students who remained in those public schools.  The research showed that gains from this “competition effect” started shortly after the program was expanded in 2005, even before any students had left those public schools for private school options.  Evidently, the public schools faced with more competition could see the coming threat to their enrollment numbers and responded remarkedly rapidly.  Those gains have continued since 2005, as student enrollment in the popular scholarship program has grown three-fold by 2010.

Even more interesting, the schools that showed the greatest gains were schools with a high proportion of economically disadvantaged students but were still on the borderline for qualifying for Title I funds — in other words, schools that were at risk of losing all of their Title I funds if they lost too many disadvantaged students.  (As many readers of this site know, Title I is the largest educational funding program in the history of mankind, providing significant extra federal funding to any school with a minimum percentage of its students qualifying for free and reduced lunch programs..  The funds can be used for almost any purpose that can be justified as helping close the academic achievement gap that often characterizes that population of disadvantaged students.)

We are often told that competition will undermine public schools and that the most challenged schools will be hurt the most by school choice.  But this research suggests otherwise.  The data and methodology in the linked article take some time to digest, but the authors’ conclusions seem well thought out.  (It is notable that the authors’ expertise comes from rigorous fields outside the world of “education”, where research on outcomes is often nototriously undisciplined.)  Another interesting aside:  the authors found that while the competition effect was successful at improving the performance of traditional elementary and middle schools, it had less impact on the existing public high schools in the same areas.  Why?  The authors suspect that because tuition at the competing private high schools was so much higher than at private elementary and middle schools, the tax credit scholarships were less effective at enabling parents to afford private high schools.  Educators at local public high schools could tell that private competition was less of a threat to them, and consequently, they did not appear to make the same effort to improve those schools.

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