Estimating the Cream Skimming Effect of School Choice

We derive a formula to determine the degree to which a school choice program may harm public school stayers by luring the best students to other schools. The "cream skimming" effect is increasing in the degree of heterogeneity within schools, the school choice take-up rate of strong students relative to weak students, and the dependence of school outcomes on student body quality. We use the formula to investigate the cream skimming effect of hypothetical voucher programs on the high school graduation rate and other outcomes of the students who would remain in public school. We find small effects across a wide variety of model specifications and types of modest voucher programs.