The Regulation of Charter Schools: National Patterns and Causal Effects

There is considerable debate and evidence about how governments should regulate contractors and other firms, but little on how government should regulate schools. In the first phase of this study, we focus on the correlation between indices of state charter school policies and measures of charter quantity (market share) and three measures of quality: statewide student achievement growth from the Center for Research on Education Outcomes (CREDO), closure of low-performing charter schools, and charter entry into low-performing school districts. States with no charter caps, multiple charter authorizers, and stronger contract renewal standards have higher charter market shares. We also see some evidence of a quality-quantity trade-off, so that increasing the number of charter schools is associated with reduced quality. The positive correlation between charter market share and the number of charter authorizers motivates a follow-up causal analysis. Using difference-in-differences analysis, we find evidence that adding a statewide authorizing body increased the statewide charter market share and the share of charter students from low-income households.