The Competitive Impact of School Choice

A reader asks, in response to a post about a study show school choice in Ohio had a competitive benefit to public schools,

Do you have any research comparing the effectiveness of vouchers vs. the effectiveness of tax credit programs such as the PA EITC?

The PA EITC seems to be a poor substitute as it is limited by the legislature, fails to provide universal school choice, relies on corporate level taxation (and PIT paid by s-corp shareholders and partners), limits school choice to low income households and worst of all, is administered by the Department of Community and Economic Development---a travesty that should be eliminated.

Seems we can do better. I'd appreciate seeing data comparing tax credits to vouchers.

She is correct in all the shortcomings of the EITC. It ranks relatively low in the Friedman Foundation's ranking of school choice programs, based on its low purchasing power and limited funding – it covers a small percentage of the cost of private schools and serves a very small percentage of PA students.

However, new studies of both the Ohio program and the Milwaukee program indicate a competitive benefit on public schools, though these programs are also limited – Ohio by funding and to students in failing public schools, and Milwaukee by a cap on scholarships and to low-income students.

Obviously a universal program with greater buying power would have a far great effect.

There is also a long-standing debate over vouchers vs. tax credits, some of which focuses on the political expediency, but there is also discussion of the effects. Adam Schaeffer's podcast from Cato give an overview of this topic.

I am not aware of any studies of the competitive impact of the EITC, or an analysis of participant outcomes scores, nor of other similar tax credit programs. I will see if I can't find more on this end.