The impact of charter schools on the efficiency of traditional public schools: Evidence from Michigan

This paper tests the hypothesis that competition from charter schools improves the efficiency of traditional public schools. The analysis utilizes a statewide school-level longitudinal dataset of Michigan schools from 1994 to 2004. Fixed effect methods and two alternative estimations are employed. The results from three alternative estimation strategies consistently show that charter competition has a negative impact on student achievement and school efficiency in Michigan’s traditional public schools. The effect is small or negligible in the short run, but becomes more substantial in the long run, which are consistent with the conception of choice triggering a downward spiral in the most heavily impacted public schools