Competition Effects of Charter Schools: New Evidence from North Carolina

Theory suggests that charter schools may affect neighboring traditional public schools either positively or negatively. Empirical findings are mixed, which may be due to variation in the policy context or estimation approach. Our contribution is in considering a new measure of charter penetration and comprehensive methodology. We combine the instrumental variables estimation with fixed effects to account for nonrandomness in charter location and student sorting. Our findings indicate that charter penetration leads to a decline in average teacher qualifications in nearby traditional public schools. Charter penetration is also associated with moderate gains in math for middle school girls.