How do public schools respond to competition? Evidence from a charter school expansion

Abstract

Despite the rapid increase in alternative schooling options across the United States in recent years, spillover effects of competition on public school students are not well understood. Standard arguments in support of school choice claim that competition creates incentives for incumbent schools to improve academic quality, but I argue that these schools may respond through increased provision of services valued by households that do not directly improve academic achievement. Using data from a charter school expansion in North Carolina, I find that charter competition had a negative effect on student achievement in public middle schools, and that this was importantly related to an increase in household influence and a decrease in teacher empowerment within incumbent schools.