Where Does Voucher Funding Go? How Large-Scale Subsidy Programs Affect Private-School Revenue, Enrollment, and Prices

NBER Working Paper No. 21687

Issued in October 2015

NBER Program(s):Children, Economics of Education, Labor Studies, Public Economics



Using a new dataset constructed from nonprofit tax-returns, this paper explores how vouchers and other large-scale programs subsidizing private school attendance have affected the fiscal outcomes of private schools and the affordability of a private education. We find that subsidy programs created a large transfer of public funding to private schools, suggesting that every dollar of funding increased revenue by a dollar or more. Turning to the incidence of subsidies and the impact of subsidies on enrollment, our findings depend on the type of program introduced, with programs restricting eligibility to certain groups of students creating relatively large enrollment gains and small price increases compared to unrestricted programs. We calculate elasticities of demand and supply for private schools, and discuss welfare effects.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w21687

Published: Daniel M. Hungerman & Kevin Rinz, 2016. "Where does voucher funding Go? How large-scale subsidy Programs Affect Private-School revenue, enrollment, and prices," Journal of Public Economics, vol (). citation courtesy of

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