Is the Juice Worth the Squeeze? A Benefit/Cost Analysis of the District of Columbia Opportunity Scholarship Program

Three years ago, Patrick Wolf and colleagues published a powerful defense of the D.C. Opportunity Scholarship Program (OSP): In an IES-funded, gold-standard study, they found that merely offering a student access to a voucher through OSP increased that student’s graduation rate by 12 percentage points. Those who actually used a voucher saw their grad rates jump by 21 percentage points. This article resurrects that research—but with a twist. The authors reanalyze the data against the work that several economists have done to estimate the value of a high school diploma (based on lifetime earnings and tax payments, lifespan and health, and crime rate). Using these metrics, Wolf and co-author Mike McShane estimate the societal return on investment for the increased graduation rate afforded to the District of Columbia by the OSP. (Remember that the program is federally funded; DCPS was held financially harmless when students exited for private schools, meaning that the program’s price tag—$70 million—represented a real additional cost to all U.S. taxpayers, not just those in the District.) Analyses show that the OSP marked a net societal value of about $183 million over the lifetime of the graduates, or $2.62 in benefit for every dollar spent (though Wolf and McShane admit to working with imperfect metrics; depending on how they sliced the data, the benefit ranged from 36 cents to $7.82). Just further proof that D.C.’s voucher program is well worth it.

SOURCE: Patrick J. Wolf and Michael McShane, “Is the Juice Worth the Squeeze? A Benefit/Cost Analysis of the District of Columbia Opportunity Scholarship Program” (Association of Education Finance and Policy Journal, vol. 8, no. 1, 2013).

Brandon Wright
Brandon Wright is the Editorial Director of the Thomas B. Fordham Institute.