Estimating the Effects of Private School Vouchers in Multi-District Economies

Abstract

This paper estimates a general equilibrium model of school quality and household residential and school choice for economies with multiple public school districts and private (religious and non-sectarian) schools. The estimates, obtained through full-solution methods, are used to simulate two large-scale private school voucher programs in the Chicago metropolitan area: universal vouchers and vouchers restricted to non-sectarian schools. In the simulations, both programs increase private school enrollment and affect household residential choice. However, under non-sectarian vouchers private school enrollment expands less than under universal vouchers and religious school enrollment declines for large vouchers. Fewer households benefit from non-sectarian vouchers.