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Innovation in Education Choice, Charters, and Public School Competition

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Title: Innovation in Education Choice, Charters, and Public School Competition


1
Innovation in EducationChoice, Charters, and
Public School Competition
  • Eric A. Hanushek
  • Hoover Institution
  • Stanford University

2
Choice over 20th Century
  • Schools in 1940
  • 117,000 school districts
  • 25 million students
  • Schools in 2005
  • 15,000 school districts
  • 47 million students

3
Sources of Revenue
1940 2000
Local 68 68 43
State 30 30 50
Federal 2 2 7
4
Tiebout/Friedman
  • Consumer preferences
  • Competition
  • Efficiency
  • Tiebout
  • Selection of district yields individual optimum
  • Nobody wants inefficient
  • Depends on sufficient alternatives
  • Friedman
  • Government interest ? government provision
  • Market competition

5
Alternative Choice Mechanism
  • Multiple districts
  • Declined over time
  • Not available to all
  • Individual preferences
  • Home schooling
  • Magnet schools
  • Open enrollment
  • Vouchers
  • Charter schools

6
Popularity of charter schools
  • 41 states plus DC since 1991
  • gt3,000 charter schools
  • 1.5 of total students
  • 15 of private school market, but less than home
    schooling
  • 7 percent rate of closure

7
Charter Schools, 2004
Number of students Percentage
Arizona 81,725 8.1
California 166,208 2.6
DC 12,958 16.5
Florida 67,472 2.6
Michigan 72,096 4.1
Texas 60,833 1.4
8
Evaluation issues
  • Most analysis of entry and participation
  • Shortage of reliable information on performance
  • Difficulty of selection issues
  • Very political

9
Conclusions
  • After startup, mean quality similar across
    sectors
  • Considerable heterogeneity
  • Age
  • Quality
  • Parents responsive to quality
  • Low income parents less responsive

10
Evaluation approaches
  • Model selection process Heckman (1979)
  • Instrument for attendance Neal(1997)
  • Intake randomization Howell and Peterson (2002),
    Hoxby and Rockoff (2005)
  • Matching

11
Difficulties with traditional approaches
  • Hard to find factors affecting attendance but not
    achievement
  • Results of random assignment experiments may not
    generalize
  • Aggregate matches uncertain

12
Innovations in Texas Analysis
  • Use sector differences in school value-added
  • Identify charter school effects from students who
    switch sectors
  • Control for direct effect of school switches and
    any changes in family income
  • Consider heterogeneity across schools
  • Model consumer responsiveness to quality

13
UTD Texas Schools Microdata Panel
  • Four cohorts followed 1996-2002
  • Achievement in grades 4-7 (TAAS math and reading)
  • Each cohort gt 200,000 students in over 3,000
    schools
  • gt250 distinct charters of varying vintage

14
Texas charter schools
  • Introduced in 1995
  • Variety of legislative changes and limits with
    215 permitted in 2002
  • Most charters very young

15
Charter enrollment
1997 2002
4th grade lt0.01 0.8
7th grade 0.07 0.9
16
Participation rates by race/ethnicity
1997 2002
Blacks 0.06 2.1
Hispanics 0.04 0.8
Whites 0.01 0.5
Low income 0.03 1.0
17
Charters by vintage (analytical)
Age 1997 1998 1999 2000 2001 2002 Total
startup 17 10 70 83 43 47 270




18
Charters by vintage (analytical)
Age 1997 1998 1999 2000 2001 2002 Total
startup 17 10 70 83 43 47 270
two 2 16 9 69 78 40 214



19
Charters by vintage (analytical)
Age 1997 1998 1999 2000 2001 2002 Total
startup 17 10 70 83 43 47 270
two 2 16 9 69 78 40 214
three 0 2 15 8 68 73 166
Four 0 1 2 15 8 66 92
Five 0 0 1 3 17 22 43
20
Annual exit rates
Move to other public school from Move to other public school from
Charter Regular
4th to 5th 24.3 13.0
5th to 6th 24.2 12.6
6th to 7th 21.7 10.9
21
Annual exit rates
Move to other public school from Move to other public school from Exit Texas public schools from Exit Texas public schools from
Charter Regular Charter Regular
4th to 5th 24.3 13.0 22.8 7.2
5th to 6th 24.2 12.6 19.3 6.6
6th to 7th 21.7 10.9 15.9 7.0
22
Change in peers at entry from public schools
Change in percent black Change in percent Hispanic
Blacks 14.4 -10.3
Hispanic 0.9 -5.4
Whites -2.3 -10.0
23
Empirical framework (value-added)
  • Identify charter school from sector switches
  • Control for confounding influences associated
    with sector changes

24
Average Charter School Effect
Student fixed effect yes yes yes
Own mobility yes yes yes
Peer turnover yes yes
Peer achievement yes
Charter school -0.18 -0.28 -0.13 -0.17
25
Charter school effect by school age
Age Student fixed effects, own and peer mobility, peer achievement
Startup -0.53 -0.33
Two -0.20 -0.25
Three -0.08 -0.08
Four -0.01 0.00
Five 0.13 0.06
26
Interrupted Panel Estimates
Charter age All Before-after entry only Omit before switch
One -0.43 -0.46 -0.46
Two -0.26 -0.30 -0.27
Three -0.03 -0.06 -0.00
Four -0.04 -0.16 -0.01
Five or more 0.05 0.08 -0.02
27
Quality distributions
28
Do parents make good decisions?
  • Parents cannot see value added
  • Considerable mobility/exiting
  • Models
  • Exitf(quality, age, year, race, grade)

29
Exits and school quality
(1) (2)
Quality 0.01 0.02
Quality x charter -0.14 -0.13
Own gain -0.01
Own gain x charter -0.01
30
Exits and school quality by income
(1) (2)
w/own gain
Quality 0.00 0.01
Quality x charter -0.19 -0.18
Quality x low income 0.01 0.01
Quality x charter x low income 0.09 0.08
31
Conclusions
  • Charters have rough beginning
  • After startup, do as well as regular publics
  • Parents much more responsive to quality
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