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The Fiscal Externalities of Charter Schools: Evidence from North Carolina

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  • Helen F. Ladd

    (Sanford School of Public Policy Duke University Durham, NC 27708)

  • John D. Singleton

    (Department of Economics University of Rochester Rochester, NY 14627)

Abstract

A significant criticism of the charter school movement is that funding for charter schools diverts money away from traditional public schools. The magnitude of such adverse fiscal externalities depends in part on the nature of state and local funding policies. In this paper, we examine the fiscal effects of charter schools on both urban and nonurban school districts in North Carolina. We base our analysis on detailed balance sheet information for a sample of school districts that experienced substantial charter growth since the statewide cap on charters was raised in 2011. We find a large and negative fiscal impact in excess of $500 per traditional public school pupil in our one urban school district, which translates into an average fiscal cost of about $3,600 for each student enrolled in charter schools. We estimate comparable to somewhat larger fiscal externalities per charter school pupil for two nonurban districts.

Suggested Citation

  • 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.
    • Handle: RePEc:tpr:edfpol:v:15:y:2020:i:1:p:191-208
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    References listed on IDEAS

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    13. Cook, Jason B., 2018. "The effect of charter competition on unionized district revenues and resource allocation," Journal of Public Economics, Elsevier, vol. 158(C), pages 48-62.
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    17. Margaret Brehm & Scott A. Imberman & Michael Naretta, 2017. "Capitalization of Charter Schools into Residential Property Values," Education Finance and Policy, MIT Press, vol. 12(1), pages 1-27, Winter.
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    Cited by:

    1. Sarah R. Cohodes & Elizabeth M. Setren & Christopher R. Walters, 2021. "Can Successful Schools Replicate? Scaling Up Boston's Charter School Sector," American Economic Journal: Economic Policy, American Economic Association, vol. 13(1), pages 138-167, February.
    2. Ridley, Matthew & Terrier, Camille, 2018. "Fiscal and education spillovers from charter school expansion," LSE Research Online Documents on Economics 91700, London School of Economics and Political Science, LSE Library.
    3. Sorensen, Lucy C. & Holt, Stephen B., 2021. "Sorting it Out: The Effects of Charter Expansion on Teacher and Student Composition at Traditional Public Schools," Economics of Education Review, Elsevier, vol. 82(C).
    4. Shi, Ying & Singleton, John D., 2019. "Expertise and Independence on Governing Boards: Evidence from School Districts," IZA Discussion Papers 12414, Institute of Labor Economics (IZA).
    5. Evgenii V. Leontev & Yulia V. Leontieva & Sergey A. Shirshov & Elizaveta Yu. Linnik, 2024. "The Validity of Personal Income Tax Deductions: Analyzing Expenses for Children’s Education in Private Schools in Moscow," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 10(1), pages 84-99.
    6. Buerger, Christian & Bifulco, Robert, 2019. "The effect of charter schools on districts’ student composition, costs, and efficiency: The case of New York state," Economics of Education Review, Elsevier, vol. 69(C), pages 61-72.
    7. Tobin, Zachary, 2024. "How do public schools respond to competition? Evidence from a charter school expansion," Economics of Education Review, Elsevier, vol. 99(C).
    8. Chen, Feng & Harris, Douglas N., 2023. "The market-level effects of charter schools on student outcomes: A national analysis of school districts," Journal of Public Economics, Elsevier, vol. 228(C).

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