Friendly Competition: Does the Presence of Charters Spur Public Schools to Improve?.

Most research on charter schools, and the most intense public debate over their desirability, has focused on the impact of these new schools on the students who attend them. But charter proponents also hope that the threat of students' leaving will spur traditional schools to higher levels of achievement. In the long run, such system-wide improvements, if positive, could even outweigh any negative effects on the individual students they enroll. [ILLUSTRATION OMITTED] Can competition from a new kind of public school, right around the block or down the road in many cases, inspire traditional schools to improve? We address this question here by examining the link between the establishment of charter schools in North Carolina and average student proficiency rates at the traditional public schools most affected by the new source of competition. Our use of proficiency rates, an aggregate measure of school performance, distinguishes our work from other recent studies that examine the performance gains made by individual students. However, aggregate school performance is the focus of state accountability systems, is reported in the media, and presumably is used by parents, along with their own observations of their child's progress, to evaluate the quality of their child's school. Schools intent on retaining students can be expected to concentrate their efforts on this indicator. Ironically, there could be a disjunction between that aggregate and the average performance of individuals at the school, for a variety of reasons. Schools affected by competition could encourage low-performing students not to take the test, could focus their efforts exclusively on students at the cusp of proficiency, or could use any number of strategies to achieve the appearance of improved performance without ensuring that students were actually learning more. Our results indicate that traditional public schools in North Carolina responded to even the limited competition provided by charter schools by improving their average proficiency rates. However, a comparison of our results with those of other studies that examine the learning gains made by individual students suggests the need for caution in interpreting our results as unambiguously positive. The Friendliest of Rivalries In three short years, from the 1996-97 school year to that of 1999-2000, the final year of our analysis, the number of charter schools in operation in North Carolina rose from zero to 74. By 2004-05, the number had grown to 99; state law currently caps the total number of charter schools at 100. Because the effects of competition on the performance of traditional public schools can be identified best during periods in which the amount of competition is changing, these years offer a convenient way to test the effects of expanded school choice. Of course, school choice was not altogether absent in North Carolina even before 1997-98. It was largely limited to choosing to live in a particular district, enrolling a child in a private school, or educating the child at home, all of which require a substantial investment of resources, fiscal or otherwise. Roughly 70 percent of districts also offered parents some degree of choice among public schools or the option of applying to a magnet school. Our results should therefore be interpreted as the effect of the introduction of additional competition from charter schools. As in most states, students in North Carolina can leave a traditional public school and enroll in a charter, at will and for no monetary cost. Charter schools may not discriminate among students by ability, socioeconomic status, or eligibility for special education. Even so, there are reasons to suspect that the amount of additional competition provided by charter schools is relatively modest. Despite the rapid growth in the number of charter schools in the state, the 12,000 students enrolled in charters in 1999-2000 represented just 1 percent of North Carolina's 1. …