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

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 “highquality” through program accountability regulations. Private schools, however, have a say in the matter. They can decide whether or not to participate in a private school choice program and likely factor the type and level of program regulations into that decision. We examine the impacts of private school regulations on the supply-side of voucher programs in D.C., Indiana, and Louisiana. Private schools value their autonomy. Therefore, we expect that regulatory burden will be negatively associated with the quality of schools that choose to participate in a choice program. Independent private schools that accept substantial regulation from the state are likely to be financially distressed and more willing to change their educational model in exchange for access to voucher-funded students. We employ a linear probability model to examine how school quality, as measured by tuition-level and Great School Review scores, is associated with program participation for schools. Our results largely confirm our hypothesis 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, indicating lower quality schools have a higher tendency of participating in voucher programs in all three states, however the coefficients are not significantly different from zero. 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