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Is there a Difference Between For-Profit Versus Not-For-Profit Charter Schools?

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  • Cynthia D Hill

    () (Idaho State University)

  • David Welsch

    () (Department of Economics, University of Wisconsin - Whitewater)

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    Abstract

    The role of for-profit educational organizations in the predominantly public and not-for-profit K-12 U.S. schooling system is being fiercely debated across our nation. Little empirical research is available to help policy makers develop informed decisions regarding the educational value that for-profit schools provide to our students. This paper fills in part, for the first time in detail, this void. This paper uses a four year panel of charter schools from the state of Michigan and a random effects model that controls for student and district characteristics. Results indicate that for-profit charter schools have lower math test scores than not-for-profit charter schools. Interestingly, this result holds even when expenditure per pupil is controlled for. The analysis developed in this paper takes the debate one step further as well, and examines the role that the size of for-profit firms plays in the associated outcomes.

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    File URL: http://www.uww.edu/cobe/economics/wpapers/08_02_Hill_Welsch.pdf
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    Bibliographic Info

    Paper provided by UW-Whitewater, Department of Economics in its series Working Papers with number 08-02.

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    Length: 27 pages
    Date of creation: May 2008
    Date of revision:
    Publication status: forthcoming in Education Economics
    Handle: RePEc:uww:wpaper:08-02

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    Postal: Whitewater, WI 53190-1750
    Phone: (414) 472-1361
    Web page: http://www.uww.edu/cobe/economics/main.html
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    Related research

    Keywords: Profit; For-Profit; Not-For-Profit; Nonprofit; Charter Schools; Random Effects; Education;

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    1. Edward L. Glaeser & Andrei Shleifer, 1998. "Not-For-Profit Entrepreneurs," NBER Working Papers 6810, National Bureau of Economic Research, Inc.
    2. Sloan, Frank A., 2000. "Not-for-profit ownership and hospital behavior," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 21, pages 1141-1174 Elsevier.
    3. Andrews, Matthew & Duncombe, William & Yinger, John, 2002. "Revisiting economies of size in American education: are we any closer to a consensus?," Economics of Education Review, Elsevier, vol. 21(3), pages 245-262, June.
    4. Sloan, Frank A. & Picone, Gabriel A. & TaylorJr., Donald H. & Chou, Shin-Yi, 2001. "Hospital ownership and cost and quality of care: is there a dime's worth of difference?," Journal of Health Economics, Elsevier, vol. 20(1), pages 1-21, January.
    5. Baltagi, Badi H. & Chang, Young-Jae, 1994. "Incomplete panels : A comparative study of alternative estimators for the unbalanced one-way error component regression model," Journal of Econometrics, Elsevier, vol. 62(2), pages 67-89, June.
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