Supplying Choice: An Analysis of School Participation Decisions in Voucher Programs in Washington, DC, Indiana, and Louisiana

Abstract

Since school voucher funds are public, policymakers fiercely debate how those funds should be spent. A goal of many decision-makers is to ensure that every private school option is “high-quality” through program accountability regulations. Private schools, however, decide whether to participate in a private school choice program and likely factor the amount of state regulations into that decision. This paper estimates the program participation decisions of the private schools in D.C., Indiana, and Louisiana. We specifically examine the impacts of voucher regulations on the supply-side of voucher programs. We employ a linear probability model to examine how school quality, as measured by revenue, tuition, enrollment, and Great School Review scores, is associated with program participation for schools. Results indicate that higher tuition-levels and larger cohort enrollments, conditions normally associated with high quality schools, identify schools that are less likely to participate in voucher programs. We also find a consistent negative relationship between Great Schools Review score and the school participation decision in all three locations; however, these coefficients are not statistically significant. State fixed effects reveal that private schools in D.C. and Louisiana, the two states that have higher regulatory burdens, are less likely to participate in voucher programs.