Fiscal and Education Spillovers from Charter School Expansion

New Findings, School Reform, July 2018

The fis­cal and edu­ca­tion­al con­se­quences of char­ter expan­sion for non-char­ter stu­dents are cen­tral issues in the debate over char­ter schools. Do char­ter schools drain resources and high-achiev­ing peers from non-char­ter schools? This paper answers these ques­tions using an empir­i­cal strat­e­gy that exploits a 2011 reform that lift­ed caps on char­ter schools for under­per­form­ing dis­tricts in Massachusetts. We use com­ple­men­tary syn­thet­ic con­trol instru­men­tal vari­ables (IV-SC) and dif­fer­ences-in-dif­fer­ences instru­men­tal vari­ables (IV-DiD) esti­ma­tors. The results sug­gest greater char­ter atten­dance increas­es per-pupil expen­di­tures in tra­di­tion­al pub­lic schools and induces them to shift expen­di­ture from sup­port ser­vices to instruc­tion and salaries. At the same time, char­ter expan­sion has a small pos­i­tive effect on non-char­ter stu­dents’ achieve­ment.