Charter schools may have a negative impact on non-charter students by draining resources and high-achieving peers from traditional public schools. Existing evidence documents that charter expansion can negatively affect districts’ budgets in settings without offsetting aid (Arsen and Ni, 2012; Cook, 2018 ), but limited work examines contexts with temporary reimbursement policies. Matthew Ridley and Camellie Terrier study the fiscal and student achievment consequences of charter expansion for traditional public school students in Massachusetts, where districts receive temporary compensation for students lost to charter schools. Exploiting a 2011 reform that lifted charter caps in underperforming districts, the authors implement complementary synthetic control and instrumental-variables difference-in-differences estimators to identify causal effects. Their results indicate that charter expansion leaves districts’ overall per-pupil revenues and total expenditures unchanged in the short run, but induces a reallocation of spending away from capital investments and support services toward instructional expenditures and salaries. The expansion also leads to gains in non-charter students’ math achievement. However, both expenditure reallocations and achievement effects attenuate over time and largely disappear once reimbursement payments expire. This pattern suggests that reimbursement policies help districts absorb the initial financial shock of charter expansion and adjust gradually to lower enrollment without generating persistent achievement gains in traditional public schools, highlighting the importance of transitional aid in education policy design.
Journal Article: https://jhr.uwpress.org/conten...
Working Paper: https://eric.ed.gov/?id=ED5931...