School choice and development: evidence from the Edgewood experiment.

AuthorMerrifield, John D.
PositionReport

On April 22, 1998, the Children's Educational Opportunity Foundation announced the availability of CEO Horizon Scholarships to residents of the Edgewood Independent School District (EISD) in San Antonio, Texas. The CEO Foundation did not limit eligibility to students with proof of superior academic talent, so the scholarships were really privately funded tuition vouchers. As such, we shall refer to them as the Edgewood Voucher Program. The EVP was a working model of Milton Friedman's (1955, 1962) original idea for a universal voucher program, except that it was set to last only 10 years. This article analyzes the EVP's immediate economic development effects, including the impact on the property tax base, housing growth and values, and business formation. We begin with an overview of the EVP, review the existing literature, describe the benchmark for our impact estimates, and then discuss the estimates and their significance for universal tuition vouchers.

EVP Overview

The Walton Family Fund and Covenant Foundation provided most of the $52.4 million that funded the vouchers. The annual tuition vouchers ranged from $2,000 for elementary school students attending a school outside the EISD boundaries to $4,700 for ind-istrict high school students. Initially, the EVP had a means test in addition to an EISD residency requirement, but with the EISD's nearly universal low-income status, the CEO Foundation quickly dropped the means test, and the EVP became a truly universal voucher program (Merrifield 2008: 14). Many families chose schools with tuition levels above the voucher amount, which meant they had to finance a tuition co-payment from other funding sources.

Edgewood school-age children did not automatically get a voucher. All were eligible, but families had to exercise their option to choose to participate (the so-called option-demand system). The EVP represents a unique middle ground between the narrowly targeted, restriction-laden, publicly funded voucher programs that exist in Milwaukee and Cleveland (Merrifield 9001) and an untargeted, Friedman-style universal voucher program (Merrifield 2008: 13) where all families participate.

Table 1 describes the pattern of voucher use from the inception of EVP in 1998-99 to 2008-09. The percentage of voucher shares should not be interpreted literally. Many voucher users would not have otherwise attended EISD schools. Voucher use minus "private students" (children enrolled in private school prior to being voucher users) exceeds EISD enrollment loss. Although some voucher users had been attending private schools without a voucher, EISD schools had been suffering enrollment losses for a long time, and the voucher may have induced some families who would have otherwise left the district to remain. Many voucher users also attended non-EISD schools prior to being voucher users. They moved to EISD, or in some cases falsified their addresses, to become voucher users. The exact count is unknown. McGroarty (2001) estimated it at 11 percent, while Peterson et al. (1999) estimated new resident voucher use at 14.9 percent. The pre-EVP EISD enrollment decline suggests that many students would have left EISD had the EVP not arisen, including many children entering school for the first time.

The voucher shares (vouchers as a percentage of EISD enrollment) shown in the last column of Table 1 put voucher use in perspective by indicating relative size. Note the large 2001-02 jump in voucher use to 12.8 percent of EISD enrolment. Also note that while voucher use rose from 888 in 1999-2000 to 1,713 in 2001-02, EISD enrollment rose by 45,3 students, a 3.5 percentage gain, the second consecutive gain and the first significant gain in many years. That gain may be an indication that new-resident voucher use rose far above the McGroarty (2001) and Peterson et al. (1999) estimates based on the early years of the EVP.

The EISD enrollment increase followed a surge in EISD test score gains that peaked in 1999-2000. After the 2000-02 surge in EVP participation, voucher use resumed its steady growth, reaching a peak of 2,042 vouchers in 2004, equal to 15.9 percent of EISD enrollment. Based on applications received, 2004-05 voucher use could have been even higher than the 2003-04 EISD enrollment peak. But after 2003-04, budget limitations forced the CEO Foundation to mostly restrict voucher use to continuing students. With attrition and graduations, voucher use declined steadily through 2007-08, the last year of the EVP when vouchers represented 8.7 percent of EISD enrollment.

Literature Review

Public school attendance area "choice" has long been associated with U.S. central city decline. Doyle and Munro (1997) investigated whether in situ school choice opportunities could stem the traditional means of school choice--namely, flight from the inner city. Raffel and Denson (2003: 4-5) noted that poorly run "city schools have been one of the factors that led to the abandonment of middle-class households from cities." At the same time, school choice advocates have argued that expanded in situ school choice, including better access to private schools and public schools of choice, could help cure the problem of inner-city flight and file related problem of de facto socioeconomic segregation between inner city and suburban addresses.

Halsband (2003) finds some revitalization benefits for charter school expansion, and Brunner et al. (2010) find significant effects of inter-district public school choice. Doyle and Munro (1997) hold that that school choice expansion is "the only possible way to anchor the middle and working classes to the city." They present strong survey results for school choice as an urban revitalization catalyst without even allowing for school choice-generated changes in the schooling options. That is, with better access to current choices, a majority of respondents (city leavers) said that choice expansion through vouchers might have prevented their departure.

But as Brunner et al. (2010) note in their introduction to a draft assessment of inter-district choice's effects on mobility, property values, and schools, there has been little or no effort to measure the revitalization effects of inner city school system improvement, or through school choice programs that 'allow escape from unacceptable schools without departing the inner city. That lack of effort is probably due to a combination of failure to realize significant improvement with the system-friendly policies that have dominated the frenzied efforts to improve school systems, especially in the inner city, and the small scope of U.S. school choice programs (Merrifield 2009). Or it may simply be an oversight as scholars focused on academic achievement effects. Within its small area, the EVP was of sufficient scale to generate some significant in-migration into the EISD, and prevent some of the out-migration that would have otherwise occurred. We turn now to our assessment of the evidence of household and business change as a result of the EVP.

Our Benchmark: The Counterfactual Basis

Most of our results have a quasi-experimental design basis. Unlike an experimental approach, the quasi-experimental control group is not the result of random assignment. We selected...

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