Do charter schools crowd out private school enrollment? Evidence from Michigan

Charter schools have been one of the most important dimensions of recent school reform measures in the United States. Though there have been numerous studies on the effects of charter schools, these have mostly been confined to analyzing their effects on student achievement, student demographic composition, parental satisfaction, and the competitive effects on traditional public schools. This study departs from the existing literature by investigating the effect of charter schools on enrollment in private schools. To investigate this issue empirically, we focus on the state of Michigan where there was a significant spread of charter schools in the nineties. Using data on private school enrollment from biennial NCES private school surveys, and using a fixed effects as well as an instrumental variables strategy that exploits exogenous variation from Michigan charter law, we investigate the effect of charter school penetration on private school enrollment. We do not find any causal evidence that charter schools led to a decline in enrollment in the private schools. Further, we do not find evidence that enrollments in Catholic or other religious schools were affected differently from those in non-religious private schools. Our results are robust to a variety of sensitivity checks.