The Fiscal Externalities of Charter Schools: Evidence from North Carolina

27 Pages Posted: 6 Dec 2017 Last revised: 30 Apr 2018

Helen F. Ladd

Duke University - Sanford School of Public Policy

John D. Singleton

University of Rochester - Department of Economics

Date Written: April 9, 2018

Abstract

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 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 more than $3,500 for each student enrolled in charter schools. We estimate comparable to somewhat larger fiscal externalities per charter school pupil for two non-urban districts.

Suggested Citation

Ladd, Helen F. and Singleton, John D., The Fiscal Externalities of Charter Schools: Evidence from North Carolina (April 9, 2018). Economic Research Initiatives at Duke (ERID) Working Paper No. 261. Available at SSRN: https://ssrn.com/abstract=3082968 or http://dx.doi.org/10.2139/ssrn.3082968

Helen F. Ladd

Duke University - Sanford School of Public Policy ( email )

201 Science Drive
Box 90312
Durham, NC 27708-0239
United States
919-613-7352 (Phone)

John D. Singleton (Contact Author)

University of Rochester - Department of Economics ( email )

Harkness Hall
Rochester, NY 14627
United States

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