When Being Regulated is a Choice: The Impact of Government Policies on Private School Participation in Voucher Programs

Private school voucher programs provide government subsidies to eligible students for tuition and other education-related costs. Parents participating in choice programs benefit from a larger and more diverse supply of education providers. Private schools must choose whether or not to participate in a voucher program in their community. In deciding, private school leaders likely weigh program participation benefits against any associated regulatory costs. The higher the regulatory costs of participation, the less likely a private school is to participate in a school voucher program, given a fixed amount of benefit. Since we do not know with certainty which regulations will be viewed by school leaders as more or less costly, we explore whether specific regulations that are common to private school choice programs do or do not deter likely voucher program participation. We use a survey experiment to identify regulatory provisions that are deal-breakers for private schools. We randomly assign different regulations to 4,825 private school leaders in the states of California and New York and ask them whether or not they would participate in a new school voucher program during the following school year. Relative to no regulations, our most conservative models find that open-enrollment mandates reduce the likelihood that private school leaders are certain to participate in a hypothetical choice program by about 19 percentage points, or 60%. State standardized testing requirements reduce the likelihood that private school leaders are certain to participate by 9 percentage points, or 29%. We find no evidence to suggest that the prohibition of copayment or nationally norm-referenced testing requirements affect the overall willingness to participate in a voucher program.