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Enhancing economic freedom via school choice and competition: Have state laws been enabling enough to generate broad‐based effects?

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  • John Garen

Abstract

An aspect of economic freedom that varies across U.S. states is K‐12 educational freedom. Some states allow a degree of choice for families in selecting schools outside public schools for their children. However, the enabling laws for such programs are often quite restrictive and limited to few children. Can this limited degree of competition and choice have a noticeable effect on an entire state's overall K‐12 performance? I find strikingly large test score gains for states that have adopted voucher programs and/or Education Savings Accounts (ESAs), swamping the effect of per pupil K‐12 spending on test scores. Moreover, vouchers and ESAs are associated with less per pupil spending. These effects are robust to a host of specification checks. A key factor is the amount of a program's funding that “follows the student,” even if a small number of students are eligible. Overall, it seems that even a small measure of educational freedom has a large effect.

Suggested Citation

  • John Garen, 2023. "Enhancing economic freedom via school choice and competition: Have state laws been enabling enough to generate broad‐based effects?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 82(4), pages 289-312, July.
    • Handle: RePEc:bla:ajecsc:v:82:y:2023:i:4:p:289-312
    DOI: 10.1111/ajes.12515
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    2. David N. Figlio & Cassandra M.D. Hart & Krzysztof Karbownik, 2020. "Effects of Scaling Up Private School Choice Programs on Public School Students," NBER Working Papers 26758, National Bureau of Economic Research, Inc.
    3. John Garen, 2020. "The Allocation and Exchange of Property Rights as a Way to Understand Comparative Economic Systems and Managerial Economics," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 35(Winter 20), pages 43-59.
    4. C. Kirabo Jackson & Claire Mackevicius, 2021. "The Distribution of School Spending Impacts," NBER Working Papers 28517, National Bureau of Economic Research, Inc.
    5. Michael Gilraine & Uros Petronijevic & John D. Singleton, 2021. "Horizontal Differentiation and the Policy Effect of Charter Schools," American Economic Journal: Economic Policy, American Economic Association, vol. 13(3), pages 239-276, August.
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