Program Design, Incentives, and Response: Evidence from Educational Interventions

22 Pages Posted: 16 Oct 2010

Multiple version iconThere are 2 versions of this paper

Date Written: October 2010


In an effort to reform K-12 education, policymakers have introduced school vouchers - scholarships that make students eligible to transfer from public to private schools - in some U.S. school districts. This article analyzes two such educational interventions in the United States: the Milwaukee and Florida voucher programs. Under the Milwaukee program, vouchers were imposed from the outset, so that all low-income public school students became eligible for vouchers to transfer to private schools. In contrast, schools in the Florida program were only threatened with vouchers, with students of a particular school becoming eligible for vouchers only if the school received two "F" grades in a period of four years. Unlike the Milwaukee schools, Florida schools therefore had an incentive to avoid vouchers. Using school-level data from Florida and Wisconsin, this study shows that the performance effects of the threatened public schools under the Florida program have exceeded those of corresponding schools in Milwaukee. The lessons of the study are broadly applicable to New York City's educational reform efforts.

Keywords: Program design, Incentives

JEL Classification: H40, I21, I28

Suggested Citation

Chakrabarti, Rajashri, Program Design, Incentives, and Response: Evidence from Educational Interventions (October 2010). Economic Policy Review, Vol. 16, No. 2, October 2010, Available at SSRN: or

Rajashri Chakrabarti (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States


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