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Incentives and the Supply of Effective Charter Schools

Author

Listed:
  • John D. Singleton

Abstract

Charter school funding is typically set by formulas that provide the same amount for students regardless of advantage or need. I present evidence that this policy skews the distribution of students served by charters toward low-cost populations by influencing where charter schools open and whether they survive. To do this, I develop and estimate an equilibrium model of charter school supply and competition to evaluate the effects of funding policies that aim to correct these incentives. The results indicate that a cost-adjusted funding formula would increase the share of disadvantaged students in charter schools with little reduction in aggregate effectiveness.

Suggested Citation

  • John D. Singleton, 2019. "Incentives and the Supply of Effective Charter Schools," American Economic Review, American Economic Association, vol. 109(7), pages 2568-2612, July.
    • Handle: RePEc:aea:aecrev:v:109:y:2019:i:7:p:2568-2612
    Note: DOI: 10.1257/aer.20171484
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    Cited by:

    1. Christian Buerger, 2020. "The Influence of Finance Policies on Charter School Supply Decisions in Five States," Public Budgeting & Finance, Wiley Blackwell, vol. 40(2), pages 44-74, June.
    2. Stephane Lavertu & Long Tran, 2025. "For‐profit milk in nonprofit cartons? The case of nonprofit charter schools subcontracting with for‐profit education management organizations," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 44(1), pages 236-265, January.
    3. Tobin, Zachary, 2024. "How do public schools respond to competition? Evidence from a charter school expansion," Economics of Education Review, Elsevier, vol. 99(C).
    4. Helen F. Ladd & John D. Singleton, 2020. "The Fiscal Externalities of Charter Schools: Evidence from North Carolina," Education Finance and Policy, MIT Press, vol. 15(1), pages 191-208, Winter.
    5. Cristián Sánchez, 2025. "Equilibrium Consequences of Vouchers Under Simultaneous Extensive and Intensive Margins Competition," Working Papers Central Bank of Chile 1038, Central Bank of Chile.
    6. Ferreyra, Maria Marta & Kosenok, Grigory, 2018. "Charter school entry and school choice: The case of Washington, D.C," Journal of Public Economics, Elsevier, vol. 159(C), pages 160-182.
    7. Amit Gandhi & Jean-François Houde, 2019. "Measuring Substitution Patterns in Differentiated-Products Industries," NBER Working Papers 26375, National Bureau of Economic Research, Inc.
    8. Dennis Epple & Francisco Martinez-Mora & Richard Romano, 2021. "Charter School Practices and Student Selection: An Equilibrium Analysis," NBER Working Papers 29529, National Bureau of Economic Research, Inc.
    9. Bau, Natalie, 2019. "Estimating an Equilibrium Model of Horizontal Competition in Education," CEPR Discussion Papers 13924, C.E.P.R. Discussion Papers.
    10. Hörnig, Lukas & Schäfer, Max, 2025. "The value of school choice opportunities," Labour Economics, Elsevier, vol. 95(C).

    More about this item

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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