For-profit versus not-for-profit charter schools: an examination of Michigan student test scores

Cynthia Hill and David Welsch

Education Economics, 2009, vol. 17, issue 2, pages 147-166

Abstract: The role of for-profit educational organizations in the predominantly public and not-for-profit K-12 US schooling system is being fiercely debated across our nation. Little empirical research is available to help policy-makers develop informed decisions regarding the educational value that for-profit schools provide to our students. This paper fills in part, for the first time in detail, this void. This paper uses a four-year panel of charter schools from the state of Michigan to estimate a school-level education production function and employ a random effects model that controls for student and district characteristics. The results find no evidence of a change in efficiency when a charter school is run by a for-profit company (versus a not-for-profit company). The analysis developed in this paper takes the debate one step further as well, and examines the role that the size of for-profit firms plays in the associated outcomes. There is some evidence that small for-profit companies are either less efficient or enroll a different type of cohort of students than not-for-profit schools.

Keywords: profit; for-profit; not-for-profit; non-profit; charter schools; random effects; education; education production function (search for similar items in EconPapers)
Date: 2009

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