Working Paper: NBER ID: w21687
Authors: Daniel M. Hungerman; Kevin Rinz
Abstract: 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.
Keywords: voucher funding; subsidy programs; private school revenue; enrollment; prices
JEL Codes: H2; I2; I22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| introduction of subsidy laws (H20) | changes in private school revenue (I21) |
| restricted subsidy programs (H53) | substantial enrollment gains (I23) |
| restricted subsidy programs (H53) | modest price increases (P22) |
| unrestricted subsidy programs (H53) | higher per-student revenue (I23) |
| unrestricted subsidy programs (H53) | no significant enrollment growth (I23) |
| school subsidy laws (H20) | substantial impacts on private school revenue (H52) |
| dollar of subsidy funding (H84) | revenue increase by at least a dollar (H27) |
| subsidy program type (H53) | nature of revenue increase (H27) |
| subsidies (H20) | schools capturing the entire subsidy (H52) |
| subsidies (H20) | families benefiting more directly (J12) |
| private school revenue (I23) | greater lobbying for subsidies (D72) |