I'd like to talk today about that evidence, about policy initiatives that can foster increased competition, and about the complications that are frequently swept under the rug in the school choice debate. Evidence School competition has attracted a lot of attention from economists in recent years. Because choice cannot be bad in traditional economic models, researchers take it as given that increased choice benefits families that choose the newly available options. The answer is yes. Almost across the board, researchers have found that competition is good for public schools.
Academic outcomes are better.
Researchers found that students who attended school in communities where student enrollment is dispersed among many educational providers subsequently scored higher on standardized tests, completed more years of schooling, and earned higher wages. Average per pupil expenditures by the public school system are substantially lower in states and communities where there are more public school districts to choose from. The bottom line is that an environment where schools must compete with other educational providers to attract students forces school districts to get more bang for their buck, or in other words, to use their resources more efficiently. For example, my own work on Texas suggests that school districts in highly competitive parts of the state have been up to twice as efficient as other Texas districts. Interestingly, the research suggests that the source of the competition doesn't seem to matter very much.