What is Public School

In their article "A Structural Model of Public and Private Schools," Dennis Epple and Richard Romano developed a theoretical framework to analyze the competition between tax-funded public schools and tuition-based private schools. The model accounts for variations in student abilities and family incomes, as well as the influence of peer effects on educational outcomes. A key prediction is that private schools will offer tuition discounts to attract high-ability students, thereby enhancing the overall academic environment through positive peer interactions. This strategy leads to a stratification where private institutions predominantly serve students from higher-income families, while public schools cater to a more diverse student body. The authors also examine the potential impact of educational vouchers, cautioning that without appropriate regulations, such programs could exacerbate educational inequality by enabling private schools to "cream skim" the most advantaged students. To mitigate this, they suggest implementing policy measures like tuition floors and ceilings to promote equitable access and prevent excessive stratification. Overall, the study provides valuable insights into the dynamics of school competition and offers policy recommendations to balance educational quality and equity.