Competition in the Non-Profit Sector: Evidence from a Charter School Expansion in North Carolina

Zachary Tobin

The number of schooling options available outside of the traditional public system has risen rapidly for American households over the past few decades, but the spillover effects of school competition on the students that remain enrolled in traditional public schools are still not well understood. While existing studies of school competition often choose to model public schools as stand-ins that do not make strategic decisions or similarly to for-profit firms, I argue that theories of competition among non-profit charities more accurately capture the incentives of public-school educators. Using data from a large-scale charter school expansion that occurred in the state of North Carolina following a policy change in 2011, I find that charter competition had a negative effect on the academic achievement of students that remained enrolled in traditional public schools, and I also provide evidence of some relevant underlying mechanisms. In particular, I find that competition is associated with an increase in the provision of consumption amenities to households that do not directly improve academic achievement. Further, I find that the negative effects of competition on test scores are even larger in situations in which traditional public schools are competing with charters managed by for-profit organizations. Overall, these results raise important questions not just about the efficacy of school choice as a tool for improving academic performance, but also about the fundamental objectives of a school.

About Zachary Tobin

Zachary Tobin is a Ph.D. candidate in Economics at Arizona State University. His research interests lie broadly in the field of labor economics, with a particular focus on the role that educational experiences play in determining labor market outcomes. His interest in education is influenced by interactions he had with students he tutored at both the elementary and post-secondary levels during his undergraduate studies. His dissertation focuses on how public schools respond to competition from charter schools, and the role of policy in shaping how school competition impacts student outcomes in both public and charter schools. Some of his other current projects focus on racial and gender disparities in post-secondary enrollment, as well as determinants of the gender wage gap among college graduates. Prior to his doctoral studies, Zachary earned an M.A. in Economics from the University of Texas at Austin, and a B.B.A. in Economics from the University of Miami, where he also earned minors in Mathematics, Finance, and Music.