Incentives and the Supply of Effective Charter Schools

John Singleton

Charter school funding is typically set by formulas that provide the same amount for all students regardless of advantage or need. In this paper, I present evidence that this policy skews the distribution of students served by charters towards low-cost populations. I develop and estimate an empirical model of charter school supply and competition to evaluate the effects of funding policies that aim to correct these incentives. To do this, I recover estimates of cost differentials across student populations by linking charter school effectiveness at raising student achievement with unique records of charter school expenditures gathered from Florida. I then leverage revealed preference with entering charter schools’ location choices in an entry game to uncover how charter schools respond to competitive and financial incentives. The results indicate that a cost-adjusted funding formula would significantly increase the share of charter schools serving disadvantaged students with little reduction in aggregate effectiveness.

About John Singleton

John D. Singleton is a Ph.D candidate in Economics at Duke University where his primary research interests include school choice and public finance. John’s research applies tools from industrial organization to understand the role of policy in shaping education outcomes. His dissertation work examines whether charter school funding is effective at incentivizing competition or leads charter schools to underserve costly-to-educate students and simulates the effects of counterfactual funding policies on the demographic composition and aggregate effectiveness of charter schools. Beyond his interest in education, John’s work on the history of economics has appeared in History of Political Economy. Prior to doctoral study, John received his B.A. in Economics from Calvin College in 2008 and a M.A. in Economics from the University of Colorado Denver in 2010.