Do education vouchers prevent dropout at private high schools? Evidence from Japanese policy changes

► We estimate private high school voucher programs' effect to prevent dropout. ► We use school-track level panel data of all high schools in northern Japan. ► We use prefectural variation in the amount of voucher to identify policy effect. ► We employ instrumental variable methods to allow endogenous policy changes. ► We find that increasing voucher prevents dropout of students on vocational tracks.