Charter schools have recently emerged as popular and effective alternatives to traditional public schools. Less than two decades since charter schools first came on the scene, the nation has 4,578 charter schools dispersed across forty-one states and the District of Columbia. These schools enroll 1.4 million students, and their rapid growth shows no sign of abating.
As charter schools continue to grow in size and number, so does their influence on traditional public school systems. Critics charge that charters rob traditional public schools of their most promising and motivated students and the resources they need to provide a quality education, since the size of school budgets corresponds to the number of students enrolled. Charter schools’ proponents, relying on market theory, argue that traditional public schools can be expected to respond to competition for students—who are proxies for customers—by improving the quality of education they offer.
Using student-level data, this paper examines the impact of charter schools on the academic performance of students who remain in the local public schools of New York City, instead of joining its rapidly expanding charter sector. In particular, it tests whether there is a relationship between how much math and reading skill a regular public school student has acquired during a school year and the percentage of his or her classmates who left for a charter school at the end of the previous school year, controlling for both observed and unobserved factors pertaining to the student and his or her school.
The analysis reveals that students benefit academically when their public school is exposed to competition from a charter. Findings include:
- For every 1 percent of a public school’s students who leave for a charter, reading proficiency among those who remain increases by about 0.02 standard deviations, a small but not insignificant number, in view of the widely held suspicion that the impact on local public schools of students’ departures for charter schools would be negative.
- Competition from charter schools has no effect on overall student achievement in math.
- In both math and reading, the lowest-performing students in public school benefit from competition from charter schools.