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Research & Commentary: Universal ESA Program Could Produce More Than $1.6 Billion in Social Benefits in Mississippi

February 22, 2018

Benefits Include More High School Graduates, Fewer Felons, Increased Per-Capita Personal Income

A new report from the Wisconsin Institute for Law & Liberty (WiLL) and Mississippi State University’s Institute for Market Studies estimates a universal education savings account (ESA) program could, due to increasing high school graduation rates and a decrease in criminal activity, result in more than $1.6 billion in accrued economic impact to the State of Mississippi.

Mississippi’s Game Changer: The Economic Impact of Universal School Choice in Mississippi, authored by WiLL Research Director Will Flanders and Cato Institute Policy Analyst Corey A. DeAngelis, draws on their previous research on the economic impact of the Milwaukee Parental Choice Program and shows, according to Flanders, “the benefits of school choice extend far beyond the immediate financial impacts to have a transformative, economic impact on the state.”

These impacts include up to 7,800 more high school graduates by the year 2036, leading to $1.6 billion in social benefits, as well as a reduction in the number of felons of 10,000 over the same time period and a reduction in the number of misdemeanants by close to 14,000, producing a $384 million reduction in social costs. They also estimate a universal ESA could cause Mississippi to move out of its current position, last place, in per-capita personal income. The improvement – a $2,300 growth in per-capita personal income by 2036 – could happen in just 14 years, the researchers say.

With an ESA, state education funds allocated for a child are placed in a parent-controlled savings account. Parents are then able to use a state-provided, restricted-use debit card to access the funds to pay for the resources chosen for their child’s unique educational program. Normally, these ESA funds can be used to pay for tuition and fees at private and parochial schools, textbooks and curriculum, online learning programs, tutoring services, and educational therapies. 

Mississippi currently has on its books the Equal Opportunity for Students with Special Needs Program, an ESA for special-needs students. But eligibility for that program is limited to just 13 percent of Mississippi students. Further, it’s restrictive enrollment cap and low level of funding mean that just 153 students will be able to take advantage of the program during the 2017­–18 school year. However, polling by Empower Mississippi from December 2016 has shown the program to be a rousing success with participating families, and more recent polling shows 82 percent of Magnolia State voters support the program. Additionally, 65 percent are in favor of the program’s universal expansion.

Not only are school choice programs like ESA’s broadly popular, they are also effective. In May 2016, EdChoice released a report in which it examines 100 empirical studies of school choice programs. Eighteen of these studies used random assignment to measure outcomes, referred to in academia as the “gold standard.” The overwhelming majority of the available empirical evidence makes clear school choice offers families improved access to high-quality schools that meet their widely diverse needs and desires, and it does so at a lower cost while simultaneously benefitting public school students and taxpayers, decreasing school segregation, and improving civic values and practices.

“This paper shows that Mississippi could realize substantial economic benefits from the creation of an expansive ESA program,” the authors conclude. “Over the next twenty years, this program would be expected to lead to a significant enough change in per capita income for Mississippi to get out of last place when compared to other states. As highlighted in this report, there are few other policies that could lead to as dramatic a change in personal income as the implementation of a broad-based ESA. For policymakers, this report suggests that the implementation of an ESA is not only a smart choice when one considers the tangible academic benefits that accrue to choice participants, but also from the perspective of improving Mississippi’s economic standing.”

While an attempt to pass a universal ESA failed in the Mississippi State Legislature in 2018, supporters of education freedom hope lawmakers will take a closer look at the popularity and efficacy of school choice programs in 2019. The goal of public education in the Magnolia State today and in the years to come should be to allow all parents to choose which schools their children attend, require every school to compete for every student who walks through its doors, and make sure every child has the opportunity to attend a quality school.

The following documents provide more information about education savings accounts.

Mississippi’s Game Changer: The Economic Impacts of Universal School Choice in Mississippi
http://www.will-law.org/wp-content/uploads/2018/02/flanders_and_deangelis_ims_small.pdf
This report from the Wisconsin Institute for Law & Liberty and Mississippi State University’s Institute for Market Studies estimates more than $1.6 billion in economic impact could accrue because of an increase in high school graduation rates and a decrease in criminal activity resulting from the implementation of a universal ESA program.

The Economic Benefit of School Choice in Milwaukee
https://www.will-law.org/wp-content/uploads/2016/12/EBSC-MPCP.pdf
This report from the Wisconsin Institute for Law & Liberty found students who attend high-performing schools are more likely to graduate from high school, be employed, stay out of prison, and be less dependent on welfare and other government services. According to the study, the Milwaukee Parental Choice Program has a nearly $500 million realized economic impact on the state, city, and students.

Mississippi Statewide School Choice Survey
https://empowerms.org/wp-content/uploads/2018/01/2017-MS-School-Choice-Poll.pdf
According to this poll of 503 likely voters by Empower Mississippi, 77 percent of Mississippians support giving parents the right to use the tax dollars associated with their child’s education to send their child to the public or private school that best serves their needs. Further, 65 percent support expanding the state’s ESA program for students with special needs into a universal program that would be available to every student in the state.

Exploring Mississippi’s Private Education Sector: The Mississippi Private School Survey
http://empowerms.org/new-report-private-schools-mississippi-think-school-choice/
This survey from Empower Mississippi shows private schools in the Magnolia State have a high interest in participating in expanded school choice programs and have the space to accommodate thousands of additional students.

Education Savings Accounts: The Future of School Choice Has Arrived
https://www.heartland.org/publications-resources/publications/education-savings-accounts-the-future-of-school-choice-has-arrived
In this Heartland Policy Brief, Policy Analyst Tim Benson discusses how universal ESA programs offer the most comprehensive range of educational choices to parents; describes the six ESA programs currently in operation; and reviews possible state-level constitutional challenges to ESA programs.

A Win-Win Solution: The Empirical Evidence on School Choice (Fourth Edition)
http://www.edchoice.org/wp-content/uploads/2016/05/A-Win-Win-Solution-The-Empirical-Evidence-on-School-Choice.pdf
This paper by EdChoice details how a vast body of research shows educational choice programs improve academic outcomes for students and schools, saves taxpayers money, reduces segregation in schools, and improves students’ civic values. This edition brings together a total of 100 empirical studies examining these essential questions in one comprehensive report.

The Public Benefit of Private Schooling: Test Scores Rise When There Is More of It
https://object.cato.org/sites/cato.org/files/pubs/pdf/pa830.pdf
This Policy Analysis from the Cato Institute examined the effect that increased access to private schooling has on international student test scores in 52 countries around the world, finding that a 1 percentage point increase in the private share of total primary schooling enrollment would lead to moderate increases in student math, reading, and science achievement within nations.

The School Voucher Audit: Do Publicly Funded Private School Choice Programs Save Money?
http://www.edchoice.org/wp-content/uploads/2015/07/The-School-Voucher-Audit-Do-Publicly-Funded-Private-School-Choice-Programs-Save-Money.pdf
This report by Jeff Spalding of EdChoice provides a program-for-program breakdown of school voucher costs and savings. On the whole, Spalding says these programs have provided a cumulative savings of $1.3 billion since 2007, or roughly $3,400 per pupil.

Competition: For the Children
https://www.heartland.org/publications-resources/publications/competition-for-the-children
This study from the Texas Public Policy Foundation claims universal school choice results in higher test scores for students remaining in traditional public schools and improved high school graduation rates.

 

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit School Reform News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.

The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state; or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact John Nothdurft, Heartland’s director of government relations, at john@heartland.org or 312/377-4000.

Author
Tim Benson joined The Heartland Institute in September 2015 as a policy analyst in the Government Relations Department.
TBenson@heartland.org @HeartlandGR