Charter Schools can Improve Student Achievement

Source: Yusuke Jinnai website, May 2012
(emphasis added)

In this paper, I propose a new empirical approach to identify the impact of charter schools on local traditional schools. Specifically, I define direct impact as the effect of introducing charter schools on traditional-school students in grades that overlap with charter schools’ grades, while indirect impact is defined as the effect on students in non-overlapping grades. Unlike prior research work, which estimates the effects of charter school entry at the school level, I examine the impact at the grade level by exploiting the variation in gaps between grades offered by charter schools and grades at nearby traditional schools.

 

Using student-level panel data from North Carolina, this paper shows that the introduction of charter schools does not induce any significant indirect impact but generates a positive and significant direct impact on student achievement. Distinguishing between the two distinct impacts and taking into consideration both traditional-school and charter-school students, my study finds overall positive effects of introducing charter schools on student achievement. I also demonstrate that such overall effects would have been underestimated by 85% in the literature, since previous work identifies the impact of charter school entry at a moment when the direct and indirect impacts are likely to be mixed. 

 

Finally, I argue that the direct impact consists of student sorting effects and competitive effects and, by controlling for unobserved peer characteristics, demonstrate one-quarter of the positive direct impact is driven by the former while three-quarters result from the latter.
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