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The fiscal externalities of charter schools: Evidence from North Carolina

The following is the abstract from Helen Ladd and John Singleton's recent publication on the fiscal impacts of charter schools. The full report is included below.

A significant criticism of the charter school movement is that funding for charter schools diverts money away from traditional public schools. As shown in prior work by Bifulco and Reback (2014) for two urban districts in New York, the magnitude of such adverse fiscal externalities depends in part on the nature of state and local funding policies. In this paper, we build on their approach to examine the fiscal effects of charter schools on both urban and non-urban school districts in North Carolina. We base our analysis on detailed balance sheet information for a sample of school districts that experienced significant charter entry since the statewide cap on charters was raised in 2011. This detailed budgetary information permits us to estimate a range of fiscal impacts using a variety of different assumptions.

We find a large and negative fiscal impact from $500-$700 per pupil in our one urban school district and somewhat smaller, but still significant, fiscal externalities on the non-urban districts in our sample.

Helen Ladd

Helen Ladd is the Susan B. King professor of public policy and professor of economics at Duke University’s Sanford School of Public Policy. Most of her current research focuses on education policy. She is particularly interested in various aspects of school accountability, education finance, teacher labor markets, and school choice.

John Singleton

John D. Singleton is an Assistant Professor of Economics at the University of Rochester. His research focuses on empirical questions related to the equity and finance of school choice programs and the implications for policy. His dissertation work studying inequities in access to school choice generated by charter school funding policies was awarded a National Academy of Education/Spencer Dissertation Foundation fellowship. He received his BA in economics from Calvin College, an MA in economics from University of Colorado Denver, and PhD from Duke University.