An interesting job market paper from Christopher Walters of MIT:
ABSTRACT: Lottery-based instrumental variables estimates show that Boston’s charter schools substantially increase test scores and close racial achievement gaps among their applicants. A key policy question is whether charter expansion is likely to produce similar effects on a larger scale. This paper uses a structural model of school choice and academic achieve- ment to predict the effects of charter expansion for the citywide achievement distribution in Boston. Estimates of the model suggest that charter applicants are negatively selected on achievement gains: low-income students and students with low prior achievement gain the most from charter attendance, but are unlikely to apply to charter schools. This form of selection implies that lottery-based estimates understate gains for broader groups of stu- dents, and that charter schools will produce substantial gains for marginal applicants drawn in by expansion. Simulations suggest that realistic expansions are likely to reduce the gap in math scores between Boston and the rest of Massachusetts by up to 8 percent, and reduce racial achievement gaps by roughly 5 percent. Nevertheless, the estimates also imply that perceived application costs are high and that most students prefer traditional public schools to charter schools, so large expansions may leave many charter seats empty. These results suggest that in the absence of significant behavioral or institutional changes, the potential gains from charter expansion may be limited as much by demand as by supply.
HT: Alex Bartik