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Fiscal and Education Spillovers from Charter School Expansion

With an increase in the number of charter schools in the United States since the 1990s, there have been growing concerns about the potential negative impact of charter schools on students in traditional public schools. Two researchers from MIT’s School Effectiveness and Inequality Initiative, Matthew Ridley and Camille Terrier, add to the growing literature about the effects of charter schools in their discussion paper, Fiscal and Education Spillovers from Charter School Expansion. They used data from a 2011 reform that raised the cap on charter schools in Massachusetts to examine the effects on expenditures and student achievement.

The results of their regression analysis suggest that greater charter attendance increases spending in the tradional sector. Total per-pupil expenditures rose by 5.2 percent, per-pupil expenditures on instruction by 7.2 percent, and salaries increased by 5 percent in traditional public schools. Additionally, the researchers conclude that charter school expansion induces a shift in expenditures from support services to instruction and salaries. Furthermore, student achievement in traditional schools increases by by 0.033 standard deviations in math and by 0.023 in ELA, when moving from 10 to 15 percent of middle school students attending charter schools.

The authors note that when considering policy, it is important to consider the effect of charter expansion on the entire school system..