Fiscal and Education Spillovers from Charter School Expansion

Abstract

Do charter schools drain resources and high-achieving peers from non-charter schools? We provide new evidence on the fiscal and educational consequences of charter expansion for non-charter students in Massachusetts, which temporarily compensates districts losing students to charter schools. Exploiting a 2011 reform that lifted caps on charter schools for underperforming districts, we use complementary synthetic control (SC) and differences- in-differences instrumental variables (IV-DiD) estimators. Our results suggest charter expansion leaves districts’ overall per-pupil revenue and expenditure unchanged, but induces districts to shift expenditure from capital investment and support services to instruction and salaries, and ultimately increases non-charter students’ achievement in math.