Tiebout Choice and the Voucher

This paper examines who is likely to gain and who is likely to lose under a universal voucher program. Following Epple and Romano (1998, 2003), and Nechyba (2000, 2003a), we focus on the idea that gains and losses under a universal voucher depend on two effects: changes in peer group composition and changes in housing values. We show that the direction and magnitude of each of these effects hinges critically on market structure, i.e., the amount of school choice that already exists in the public sector. In markets with little or no Tiebout choice, potential changes in peer group composition create an incentive for high-socioeconomic (SES) households to vote for the voucher and for low-SES households to vote against voucher. In contrast, in markets with significant Tiebout choice, potential changes in housing values create an incentive for high-SES households to vote against the voucher and for low-SES households to vote for the voucher. Using data on vote outcomes from California's 2000 voucher initiative, we find evidence consistent with those predictions.

Universal Vouchers and White Flight

Opponents of school vouchers often argue that school vouchers will lead to 'white flight' from public schools that are disproportionately nonwhite, creating more racially segregated schools. However, recent studies that examine white flight from public schools into private schools have produced conflicting evidence on whether or not white flight actually exists. In this paper, we present new evidence on whether universal vouchers will lead to more racially segregated schools. Specifically, we use data on vote outcomes from a state-wide universal voucher initiative to estimate the likelihood that white households with children currently in public schools will use vouchers to switch out of more-integrated schools. Our results indicate that white households with children attending schools with large concentrations of nonwhite schoolchildren are significantly more likely to support school vouchers, an effect that is absent for non-white households with children and households without children. However, it also does not appear to be race, per se, that is the primary concern, but other school factors that are correlated with race, such as test scores and limited English proficiency.