Fiscal and Education Spillovers from Charter School Expansion

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Fiscal and Education Spillovers from Charter School ExpansionMatt Ridley and Camille TerrierSEII Discussion Paper #2018.02July 2018ABSTRACT

The fiscal and educational consequences of charter expansion for non-charter students are central issues in the debate over charter schools. Do charter schools drain resources and high-achieving peers from non-charter schools? This paper answers these questions using an empirical strategy that exploits a 2011 reform that lifted caps on charter schools for underperforming districts in Massachusetts. 

The results suggest greater charter attendance increases per-pupil expenditures in traditional public schools and induces them to shift expenditure from support services to instruction and salaries. At the same time, charter expansion has a small positive effect on non-charter students’ achievement.

Professor Clive Belfield of Queens College, City University of New York, reviewed Fiscal and Education Spillovers from Charter School Expansion and found that it provides important, high-quality evidence on the impacts of expanding charter schools, at least under relatively restrictive conditions.

The study uses data from Massachusetts, where charter school growth has been carefully managed and where there was significant excess demand for charter school places. In 2011, the state increased the cap on enrollments for charter schools located in school districts with low test scores, resulting in an increase in charter school enrollment in some of these districts. The paper analyzes three outcomes: (a) changes across charter and non-charter public schools in funding (how much resource was available per student), (b) resource allocation (how schools spent their funds), and (c) achievement (how well students performed on academic tests). 

The paper reaches three key findings. First, due to a subsidy provided by Massachusetts law, per-pupil expenditures in the impacted public schools increased as charter schools expanded. Second, these districts appeared to respond to competitive pressures from charter schools by moving funding toward inputs directly related to instruction. Third, test scores in math and English language arts in the existing public schools increased very slightly. Yet all three of these impacts disappear after six years of initial charter school expansion.

The paper affirms a two-part consensus from past studies on the economic and academic impacts of charter schooling. First, the flows of public funds to charter and public schools are complex, idiosyncratic, and variable. These features make economic evaluation of charter schooling very difficult. Second, the academic influence of competition between charter schools and public schools is small and, in this case, positive. This second finding suggests that expanding charter schools, at least under the relatively restrictive conditions that existed in Massachusetts, will have a benign effect on the overall education system. However, because of the first finding, it is extremely difficult to determine how cost-effective or equitable such expansions might be. 

Professor Belfield concludes that the research paper is a rigorous and intensive examination of the fiscal and educational consequences of increased enrollments in charter schools in Massachusetts. It serves as a benchmark against which other charter school studies might be compared, to explore whether results from Massachusetts are similar to those in different states and contexts.

Find the review, by Clive Belfield, at: 

http://nepc.colorado.edu/thinktank/review-charter-spillover

Also see: http://educationresearchreport.blogspot.com/2018/09/the-spillover-effects-of-charter.html