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Incentives and the Supply of Effective Charter Schools

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  • Singleton, John

Abstract

Charter school funding is typically set by formulas that provide the same amount for all students regardless of advantage or need. In this paper, I present evidence that this policy skews the distribution of students served by charters towards low-cost populations by influencing where charter schools decide to open and whether they survive. I develop and estimate an empirical model of charter school supply and competition to evaluate the effects of funding policies that aim to correct these incentives. To do this, I recover estimates of cost differentials across student populations by linking charter school effectiveness at raising student achievement with unique records of charter school expenditures gathered from Florida. I then leverage revealed preference with the exit and location choices of charter schools in an entry game to uncover how charter schools respond to competitive and financial incentives. The results indicate that a cost-adjusted funding formula would significantly increase the share of charter schools serving disadvantaged students with little reduction in the aggregate effectiveness of the sector.

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  • Singleton, John, 2017. "Incentives and the Supply of Effective Charter Schools," MPRA Paper 83532, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:83532
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    3. Amit Gandhi & Jean-François Houde, 2019. "Measuring Substitution Patterns in Differentiated-Products Industries," NBER Working Papers 26375, National Bureau of Economic Research, Inc.
    4. Bau, Natalie, 2019. "Estimating an Equilibrium Model of Horizontal Competition in Education," CEPR Discussion Papers 13924, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    charter schools; school choice; school finance;
    All these keywords.

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • I2 - Health, Education, and Welfare - - Education
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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