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Innovation in Education Choice, Charters, and Public School Competition

Innovation in Education Choice, Charters, and Public School Competition. Eric A. Hanushek Hoover Institution Stanford University. Choice over 20 th Century. Schools in 1940: 117,000 school districts 25 million students Schools in 2005: 15,000 school districts 47 million students.

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Innovation in Education Choice, Charters, and Public School Competition

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  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

  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 • >3,000 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

  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 > 200,000 students in over 3,000 schools • >250 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

  16. Participation rates by race/ethnicity

  17. Charters by vintage (analytical)

  18. Charters by vintage (analytical)

  19. Charters by vintage (analytical)

  20. Annual exit rates

  21. Annual exit rates

  22. Change in peers at entry from public schools

  23. Empirical framework (value-added) • Identify charter school from sector switches • Control for confounding influences associated with sector changes

  24. Average Charter School Effect

  25. Charter school effect by school age

  26. Interrupted Panel Estimates

  27. Quality distributions

  28. Do parents make good decisions? • Parents cannot see value added • Considerable mobility/exiting • Models: • Exit=f(quality, age, year, race, grade)

  29. Exits and school quality

  30. Exits and school quality by income

  31. Conclusions • Charters have rough beginning • After startup, do as well as regular publics • Parents much more responsive to quality

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