The Impact of Ohio's EdChoice on Traditional Public School Performance

Over the course of the last 35 years, traditional public school student achievement in the United States has been stagnant, despite myriad reform efforts and a doubling in total expenditures on K-12 education (Ravitch 2000, Hanushek 1986, Greene 2005). The ramifications of this academic achievement plateau on human capital development and thus the country's global economic standing are of paramount importance (Heckman and Masterov 2007). Thus, one of the most important public policy questions that government and society faces is how to improve the academic performance and quality of the nation's public education system. Prominent among recent reform policies have been the twin pillars of accountability and school choice. Although many states were already implementing accountability programs, which required all schools to administer statewide standardized exams and then provided rewards and sanctions based on those results, the passage of the federal No Child Left Behind Act (NCLB) in 2001 made such policies a prerequisite for receiving federal funds. As a result, since the enactment of NCLB, all 50 states have now implemented statewide standardized testing and public reporting of school performance (Goertz 2005). The federal law provides for a series of sanctions for chronically underperforming schools, but states have also supplemented the federal policy with rewards and sanctions of their own. Among the sanctions utilized by several states are requirements that students in failing schools be offered a wider range of school choices. The State of Ohio, in particular, has pursued the education reform strategy of providing various school choice programs as a sanction for poor performance. Beginning in 1998, the state implemented a charter school program which is now tied directly to the accountability grading system. Similarly, in 2005 the state legislature enacted the Educational Choice Scholarship program (EdChoice), which provides vouchers to students in chronically underperforming schools, allowing them to attend private and religious schools. School choice programs such as charter schools and vouchers serve two distinct purposes, at least in theory. The first purpose is to provide a direct and immediate outlet for students assigned to poorly performing traditional public schools. The second purpose, however, is perhaps the more important one. The competition that is created for students, as traditional public schools seek to maintain their enrollment levels (and the funding tied to those students) in the face of new schooling alternatives, is expected to create incentives for systemic improvements in the quality of education for all students (McEwan 2000, Chubb and Moe 1990). These hypothesized benefits of competition may or may not be realized when charter and voucher programs are actually implemented, and some argue that competition may be detrimental to the quality of traditional public schools (Fiske and Ladd 2000, Henig 1994, Meier and Smith 1995). In this article, I evaluate the effects of the EdChoice voucher program on the academic performance of traditional public schools. Specifically, I investigate how exposure to the threat of losing students to the voucher program affected standardized test performance in traditional public schools. This measure does not take into account whether or not students participated in the EdChoice program, only whether schools faced the threat of potentially losing students. The study provides the opportunity to make two important contributions to the literature. First, it provides an analysis of a voucher program that has not yet been rigorously studied for its competitive effects on traditional public schools. Second, a novel approach is introduced to deal with the potential confounding effects of stigma, or the motivation for schools to improve that may come with the receipt of a low grade publicly reported by the state. To be clear, the study does not consider the effect of the EdChoice program on those students who actually use a voucher to attend another school. …