Case Study: Vouchers in Edgewood (a Suburb of San Antonio Texas)

Education Vouchers Benefit Edgewood Students

Brief Analyses | Education

No. 699
Thursday, March 25, 2010

by John D. Merrifield

Tuition voucher programs attempt to improve academic performance through school choice. Vouchers pay a set amount to schools chosen by the students' families. Some programs are federally funded (like the D.C. Opportunities Scholarship Program), funded by local government (such as the Milwaukee Parental Choice Program) or privately funded.

Government-funded programs generally have strict eligibility requirements for students and often restrict the type of school a student can choose. For example, many government programs will not allow voucher students to attend a school with a religious affiliation.

From 1998 to 2008, the Children's Educational Opportunity (CEO) Foundation funded a $52.4 million voucher program for residents of the low-performing Edgewood Independent School District in San Antonio, Texas. The vouchers were available to any student in Edgewood whose family chose to participate, regardless of academic ability or income.
The evidence shows that the voucher students weren't the only ones who benefited. The students who remained in the Edgewood public schools benefited from increased funding resources due to increasing property values, and improvements in the public schools in response to increased competition.
Edgewood Voucher Program. The CEO vouchers ranged from $2,000 to $4,700 per year, depending on the student's grade level and whether the selected school was in the Edgewood district. If a student chose to attend a private school with tuition higher than the voucher amount, the student's family made up the difference.   


The program remained open to all residents through the 2003-2004 school year. After 2003-2004, budget limitations forced CEO to restrict vouchers mostly to continuing students. Thus, after peaking in 2003-2004, when 15.9 percent of the district's 12,873 students used vouchers, participation dropped to 8.7 percent of Edgewood's 11,735 students in 2007-2008.
Effect on Voucher Recipients. A first-year evaluation of the program showed that participants were very similar to Edgewood students. In fact, in the initial year, participants and nonparticipants scored the same on standardized exams.

Unfortunately, for comparative purposes, voucher students took a different standardized test to gauge their progress than students who remained in the public schools. Therefore, there is no basis to estimate what the voucher users' achievement level would have been had they not participated in the program. However, the probability of graduating high school and attending college significantly increased among voucher students:

• While Edgewood's four-year graduation rate peaked at 80 percent in 2004 (see below), the three private high schools that educated the majority of voucher users reported graduation and college attendance rates approaching 100 percent. 
• Indeed, a 2007 study found college attendance rates for voucher students were 91 percent and 93 percent in 2005 and 2006, respectively. 
• By contrast, as an indicator of interest, the proportion of district high school students taking college admissions tests barely topped 60 percent in 1999, 2000 and 2007.

Effect on Performance of Edgewood's Public Schools. The Texas Education Agency uses student performance on standardized tests to classify each public school as exemplary, recognized, acceptable or unacceptable. The second year after the vouchers were introduced - the 1999-2000 school year - was the first year that Edgewood had an exemplary school. In fact, Edgewood went from zero exemplary schools to three in 1999-2000. From 1998 to 2008, the number of recognized Edgewood campuses tripled from three to nine, and the single unacceptable campus was reclassified as acceptable.

Furthermore, Edgewood significantly increased its high school graduation rate. The district's graduation rates were compared to a number of other districts with similar demographics. An analysis found:

• If Edgewood's high school graduation rate had increased at the average rate for comparable school districts, it would have risen from 57 percent in 1998 to 63.2 percent in 2004. 
• Instead, Edgewood's graduation rate rose to 80 percent in 2004 (the peak year of voucher program participation), and, thus, nearly 17 percentage points of the increase is attributable to the voucher program [see the figure].

While these advancements cannot all be directly credited to the voucher program, the timing suggests the program did play a role in improving Edgewood's performance.

Effect on Edgewood's Property Values and Population. From 1998 to 2007, the average assessed value of Edgewood residential property rose $22,779, of which probably $6,000 to $7,000 can be attributed to the voucher program's existence. The number of single family dwellings in Edgewood grew 7.4 percent from 1998 to 2008. 

As a result, Edgewood's property tax revenue increased, netting the district an extra $10.6 million. Because local property tax revenue is a factor in the Texas school funding formula, per pupil spending for the Edgewood district increased, benefitting nonvoucher students.
The sudden increase in the number of residences and property values indicates the desire of parents to move to the district in order to qualify their child for the voucher program.  While the exact number is unknown, many voucher students previously attended non-Edgewood public schools, moving to the district specifically for voucher eligibility. Other families would undoubtedly have left Edgewood had the vouchers not existed.

Conclusion. Universal school choice programs like the Edgewood voucher program can have a strong economic effect on a community. Moreover, students benefit from having a choice in the school they attend - even if they remain in the public schools.

States, cities, counties or school districts can use universal voucher programs to attract families and businesses at no net fiscal cost, and also improve their public schools.

John D. Merrifield is a professor of economics at the University of Texas at San Antonio and a senior fellow with the National Center for Policy Analysis