A considerable body of research exists on whether students who attend private school with a voucher benefit academically. Whether public schools improve in response to the challenge of voucher programs, however, has been less thoroughly studied. This study provides new evidence on how public schools fare when faced with the challenge of school choice. School districts in Edgewood, Texas, and in Milwaukee, Wisconsin, that have school voucher programs were selected to investigate the effects of school choice on traditional public schools in those same districts. Student test scores in public schools exposed to competition by nearby charter and private schools were compared against control-group public schools to reduce demographic and economic influences on the data. Results show that public schools near charter and private schools respond to competition by improving educational services. In Texas, the Edgewood School District did as well as or better than 85 percent of the Texas school districts. In Milwaukee, significant improvements were found in public-school test scores because of competition from charter and private schools. Further study is needed to bolster research on how school choice affects the quality of educational services provided by public schools. (Contains 11 references.) (RT)