The Effect of Free Tuition in Private High Schools on the High School Dropout Rate

This study investigates the causal effect of school vouchers on high school dropout behavior. In 2010, the Japanese government began offering free tuition for public high schools and financial support for students attending private high schools in response to the international movement toward free education and dramatic changes in the government. Since then, approximately half of all prefectures have made private high schools tuition free by 2019 under certain income restrictions. We use this variation to examine the preventive effect of the free tuition policy on student dropout behaviors. By analyzing prefecture-level panel data and performing difference-in-differences analysis, this study finds that the policy is effective in reducing dropouts. This effect is likely due to improved student-school matching through a wider range of high school choices. However, we find no change in the college enrollment and employment rates of high school graduates before and after policy implementation. The finding suggests that some graduates are neither working nor students