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Markets (vouchers, choice, for-profits, vendors)

Displaying 1 - 10 of 60

Edward Kim, Joshua Goodman, Martin R. West.

The increasing prevalence of private tutoring has received minimal scholarly attention in the United States. We use over 25 years of geocoded data on the universe of U.S. private tutoring centers to estimate the size and growth of this industry and to identify predictors of tutoring center locations. We document four important facts. First, from 1997 to 2022, the number of private tutoring centers more than tripled, from about 3,000 to 10,000, with steady growth through 2015 before a more recent plateau. Second, the number and growth of private tutoring centers is heavily concentrated in geographic areas with high income and parental education. More than half of tutoring centers are in areas in the top quintile of income. Third, even conditional on income and parental education, private tutoring centers tend to locate in areas with many Asian American families, suggesting important differences by ethnic or cultural identity in demand for such services. Fourth, we see only marginal evidence that prevalence of private tutoring centers is related to the structure of K-12 school markets, including the prevalence of private schools and charter or magnet school options. The rapid rise in high-income families’ demand for this form of private educational investment mimics phenomena observed in other spheres of education and family life, with potentially important implications for inequality in student outcomes.

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Jason Fontana, Jennifer L. Jennings.

Does state implementation of Education Savings Accounts (ESAs), which are voucher-like taxpayer-funded subsidies for children to attend private schools, increase tuition prices? We analyze a novel longitudinal dataset for all private schools in Iowa and Nebraska, neighboring states that adopted ESAs in the same legislative session, with Iowa’s implementation beginning first. By leveraging state and grade-level variation in eligibility, we provide new causal evidence that ESAs led Iowa private schools to increase tuition. Increases varied by the percentage of the grade eligible for ESAs. When eligibility was universal (kindergarten), private schools increased prices 21-25%, compared with 10-16% in grades with partial eligibility. In contrast, private schools did not increase tuition in pre-K, which was ineligible for ESAs. If a goal of ESAs is to extend private school access to new families, the substantial tuition increases they produce may limit access.

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Rebecca J. Shmoys, Sierra G. McCormick, Douglas D. Ready.

Many school districts consider family preferences in allocating students to schools. In theory, this approach provides traditionally disadvantaged families greater access to high-quality schools by weakening the link between residential location and school assignment. We leverage data on the school choices made by over 233,000 New York City families to examine the extent to which the city’s school choice system fulfills this promise. We find that over-subscribed and high-quality schools enroll smaller proportions of students from traditionally disadvantaged families. We explore three mechanisms to explain this inequitable distribution: application timing, neighborhood stratification, and the architecture of the choice process itself. We find that all three mechanisms have a disequalizing influence and propose several policy shifts to address this inequality.

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David Figlio, Cassandra M. D. Hart, Krzysztof Karbownik.

Using a rich dataset that merges student-level school records with birth records, and leveraging three alternative identification strategies, we explore how increase in access to charter schools in twelve districts in Florida affects students remaining in traditional public schools (TPS). We consistently find that competition stemming from the opening of new charter schools improves reading—but not math—performance and it also decreases absenteeism of students who remain in the TPS. Results are modest in magnitude.

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Douglas N. Harris.

Market-based policies, especially school vouchers, are expanding rapidly and shifting students out of traditional public schools. This essay broadens, deepens, and updates prior critiques of the free market logic in five ways. First, while prior articles have pointed to some of the conditions necessary for efficient market functioning, I provide a more comprehensive list. Second, with an up-to-date literature review, I show that all of these conditions fail to hold to an unusual extent in schooling, relative to other markets. Third, because of these failures, I argue that the strongest critique of the free market approach to schooling comes from the intellectual home of markets—economics. Fourth, I show that the issues leading to inefficiency are the same ones leading to inequity. Fifth, I argue that the analysis points to specific roles for government, which go well beyond those included in new universal school voucher policies, but which are also narrower than the roles of government encompassed in traditional public education. For these reasons, the current direction of policy is off-track and apparently inconsistent with the main criteria on which we evaluate education policy and even with the values that voucher advocates themselves profess.

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Youngran Kim, Ron Zimmer.

During the pandemic, a number of states instituted hold-harmless funding policies to protect school district financially from declining enrollments (Center for Public Education, 2021). In addition, some school choice policies have protected traditional public schools financially from declining enrollments. Together, these policies raise the question of whether competitive effects can exist in a policy environment of reduced financial pressure. Theoretically, despite the lack of financial pressure, schools could feel competitive pressure in other ways including a loss of reputation as students move to schools of choice (Epple, Romono, & Urquiola, 2017; Friedman, 1962; MacLeod & Urquiola, 2009; Urquiola, 2016). To provide insights on whether schools can improve without the threat of financial loss, we examine the Seoul school choice program which introduced autonomous private high schools (APHSs) in the context in which there is equalized funding across schools. More specifically, we examine whether competition induced by APHSs affects the achievement of students attending traditional public and private schools. The effect of APHSs is identified by exploiting plausible exogenous APHSs’ entry through the random assignment of students. We find a small and positive effect of APHS penetration on the Korean and English achievement of private school students while finding no effects for traditional public schools, which have limited ability to respond.

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Andrew Bacher-Hicks, Tareena Musaddiq, Joshua Goodman, Kevin Stange.

The extent to which pandemic-induced public school enrollment declines will persist is unclear. Student-level data from Michigan through fall 2021 yields three relevant findings. First, relative to pre-pandemic trends, fall 2021 enrollment had partially recovered for low-income, Black, and Hispanic students, but had declined further for non-low-income, White, and Asian students. Second, annual public school exit rates remained elevated for elementary students and accelerated further for middle school students. Third, public school exit is sticky and varies by chosen alternative. Only 21 percent of those who left for private schools in fall 2020 had returned by fall 2021, while 50 percent of those who left for homeschooling had returned. These findings suggest that pandemic-driven public school enrollment declines may persist, and more so among higher income families.

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C. Kirabo Jackson.

This paper presents new evidence on the benefits of decentralization in public education, focusing on a Chicago policy that granted school principals more control over budgeting and operations. Meta-analysis of similar policies shows a small average effect with significant variation across settings. To explain this heterogeneity, I adopt theories from public finance, contract theory and psychology that suggest that the impact of autonomy depends on motivation effects, principal objectives, and the alignment between district and school choices. In event-study models, on average, increased school-level control improved math and English passing rates by about four percentage points (0.1σ), comparable to interventions costing over $1,000 per pupil but achieved at nearly zero cost. Affected schools also see reduced principal turnover and improved school climate, indicating increased stability and effort. Deconvolution-based analysis of the distribution of true effects reveals a range from zero at the 20th percentile to a ten percentage-point increase at the 80th percentile (approximately 0.2σ). I provide design-based evidence supporting the theoretical literature: (a) High-quality principals with a track record of strong test score growth experience more positive autonomy effects – underscoring the role of local capacity and well-aligned incentives. (b) Schools with atypical student populations benefit more from autonomy and allocate resources to services tailored to their student’s specific needs – indicating that heterogeneity plays a key role.

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Torsten Figueiredo Walter, Guthrie Gray-Lobe, Sarah Kabay.

Hardware requirements are a barrier to widespread adoption of digital learning software among low-income populations. We investigate the demand among smallholder-farming households for a simple, adaptive math learning tool that can be accessed by widely available ``brick'' phones, and its effect on educational outcomes. Over a quarter of invited households used the tool, with greater demand among households lacking electricity, radios, or televisions. Usage was highest when schools were out of session. Engagement lapsed without regular reminders to use the service. Using random variation in access to the service, we find evidence that the platform increased test scores, school attendance, and grade attainment. Interpretation of these estimates is complicated by potentially endogenous outcome observation.

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Stéphane Lavertu, Long Tran.

There is growing concern that some nonprofit public service providers may be nonprofit in name but not in fact. We consider this concern in the context of nonprofit charter schools, which sometimes subcontract their daily operations to for-profit management organizations. We use unique data from Ohio to study how nonprofit charter schools’ reliance on for-profit operators affects student achievement and attendance. The results indicate that nonprofit charters that subcontract with for-profit operators tend to be more effective and equitable in promoting student achievement (but not attendance, a less salient outcome) than nearby traditional public schools serving similar students. However, nonprofit charters that subcontract with for-profit operators tend to be less effective (with regard to both achievement and attendance) and less equitable (with regard to attendance) than other nonprofit charters nearby. Further analysis comparing the administration and outcomes of for-profit and nonprofit operators suggests that the profit motive may help explain the inferior performance of nonprofit charters with for-profit operators. Our study offers theoretical insights for literatures on charter schools, contracting, performance monitoring, and sector boundaries, and it has immediate implications for education policy and management.

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