Research shows competition from school vouchers may be limited in the short term

As expansion of Indiana’s school voucher program continues, voucher proponents argue that school choice improves efficiency and elevates the neediest students. But new research from doctoral student Yusuf Canbolat looks at how competition induced by school vouchers affects academic achievement in public schools – and found the competitive effect may be limited in the short term and depend on the voucher design.

Canbolat, a doctoral candidate in Educational Leadership and Policy Studies, became interested in school choice during his experiences with the centralized school system in Turkey, where he spent most of his educational and professional life. Since he began to study education policy, he wondered about the extent to which parental choice, school autonomy and competition, the three pillars of current debates on school choice, can remedy the weakness of school systems to improve educational equity and quality.

“Many governments across the globe have launched choice reforms in different forms for the last decades to incentivize competition and autonomy. Yet most of the reforms like school vouchers are targeted to certain student populations, such as students from low-income families or those with special education needs. Therefore, understanding the systemic effect of school choice is not always possible,” he said.

Indiana in particular is an important case for studying school choice. The state has the largest and one of the most established vouchers programs in the U.S. in a time when large-scale choice programs are becoming more broad: about fifteen states created or expanded school vouchers or education saving accounts for students during the pandemic. Understanding school choice in states like Indiana or countries like Chile and Sweden where vouchers are almost universal gives a valuable perspective about the future of other school systems that plan to expand school choice, Canbolat explains.

The departure of relatively high achieving, voucher-eligible students from public schools appears to have acute detrimental effects on public schools that face higher competitive pressure that policymakers should recognize.

Yusuf Canbolat

In his research, he examined the extent to which voucher participation across districts and private school density around public schools improved or impaired proficiency rates in public schools. While there is a large body of studies on competition, Canbolat realized that most of those studies are limited to the early years of school choice programs. Theoretically, he explained the effects of competition and choice are structural and long-lasting, which can keep schools productive for decades, with advocates for school choice arguing schools eliminate ineffective instructional practices that do not contribute to the improvement in student achievement: “In the competitive organizational environment, private schools enter into the market and serve for many years if they are productive,” Canbolat said. “As a result, competition has more unique characteristics than many other reform ideas that fail to inspire productivity in the long term. I was skeptical about this argument since schools may ‘cream-skim’ relatively high achieving students under competitive pressure to boost their market position.

The main implication from Canbolat’s research is that the long-term effect of competition on public schools is different from its short-term effect. Studies often find that competitive incentives improve public schools, though they also highlight that the effect is modest in magnitude. An important limitation of prior studies was that most of them focused on the short-term effect. Indiana Choice Scholarship Program allowed Canbolat to examine the competitive effect over eight years.

“What I found is that the departure of high achieving students from public schools to private schools worsens academic outcomes in public schools in the long run. It is the result of the organizational behavior of schools in a competitive environment. They seek to attract relatively high achieving students to boost their market position instead of improving efficiency impairing educational equity and quality. Schools that face higher voucher competition such as those that have more nearby private schools experience a more considerable decrease in proficiency rates due to the flight of relatively high achieving students (i.e., proficient students in state accountability tests) from public schools to private schools,” he said.

Ultimately, Canbolat’s research suggests that decision-makers who want to implement or expand school vouchers should consider their long-term effects.

“These programs may be perceived as incentivizing educational outcomes in the short term, but the direct and indirect effects may be detrimental in the long term,” he added. “The departure of relatively high achieving, voucher-eligible students from public schools appears to have acute detrimental effects on public schools that face higher competitive pressure that policymakers should recognize. Once those students leave public schools, the fall of the learning environment's quality and student achievement could not be compensated for in the long term.”