A national 3 percent increase in charter school enrollment from 2004 to 2014 and President Trump’s recent 168-million-dollar proposed budget increase for charter schools have once again opened the ideological floodgates between charter school critics and proponents. However, parents and students should be at the forefront of this discussion, and empirical research is becoming increasingly vital to understanding student performance and parent/student satisfaction. In hopes of facilitating an empirically driven discussion with parents and students as the focal point, this post will examine current research and economic theory to address two pertinent and controversial questions regarding charter schools:

  1. Do charter school students out perform traditional public school students, and is student performance the best metric to use when evaluating charter school success?
  2. To what extent does parent satisfaction matter, and who matters most: parents, teachers, or students?

Research suggests that charter schools outperform traditional public schools on average, although there is significant variation by region and subject. The Center for Research On Education Outcomes (CREDO) reports charter student performance and traditional public school (TPS) student performance by comparing students of similar characteristics in each school body. Their results from studying 41 urban areas in 22 states from 2006-2007 and 2011-2012 indicate that students in urban charter schools received 40 additional days of learning growth in math and 28 days of additional growth in reading compared to matched TPS students, and the overall pattern of charter school performance across urban regions was positive. However, their aggregated results indicate that there is significant variation in student performance across regions as well as dramatic regional variation in marginal improvement of charter learning with some charter schools experiencing growth more slowly relative to the regional average. For example, New York City and South Bay charter schools experienced significant growth relative to the regional average while Las Vegas and Fort Worth experiences lower levels of growth relative to the regional average, as shown by the following figures.


Additionally, their results found that charter students experienced greater growth than TPS students across nearly every demographic group with disadvantaged students in urban areas receiving the greatest benefit. The study also revealed that charter schools experienced an upward trend in quality over time.

While school performance is a common outcome measuring learning and success, there is less public attention on how charter schools function as an institution. Economic theory provides insight into competition, incentives, and parental bargaining power, which ultimately drive performance outcomes. Charter schools are publically funded institutions that operate independently from traditional public school systems. Critics argue that charter schools extract resources from traditional public schools, while proponents argue that charter schools are a valuable alternative to poorly run public schools. This debate is essentially an argument over competition. While school performance differs by region due to a variety of factors, charter schools act as a competitor to traditional public schools and provide an incentive for surrounding schools to improve their performance or suffer from a loss in the study body. Competition introduces choice to the school system, allowing parents to influence school performance through their decision on where to send their children. Although charter schools promote free entry, a high demand for some charter schools can result in a lottery system for entry. In addition to competition, charter schools arguably align incentives for better teacher performance. Charter schools are not bounded by teacher union contracts nor do teachers bargain for salary or benefits. Teachers separate from unions are arguably more accountable and have interests aligned with student success and performance rather than bargained compensatory benefits. Lastly, economic theory provides insight into self-selection bias. Opponents argue that the best public school students self-select into charter schools and as a result, charter schools have better performance. However, studies from CREDO and the Manhattan Institute compared students of the same caliber in charter and public schools find that student in charter schools perform significantly better than their traditional public school counterparts.

     Friedman and Bobrowski argue that parental satisfaction is an under explored metric for evaluating charter school performance. Parents in unrestrained school districts have sufficient bargaining power over school choice and thus their satisfaction is an important factor when measuring school success and identifying areas for improvement. Friedman and Bobrowski’s study involves reports survey results from 27,605 African-American, Asian, Caucasian, and Hispanic parents from 121 schools in 27 school districts across the US. Their regression results identified factors that contributed to parental satisfaction among ethnic groups. Their findings indicate that ethnic groups differed greatly in their overall satisfaction index with African American parents being the least satisfied with their school. Satisfaction with specific school areas such as technology, curriculum, budget, and safety also differed by ethnicity. While individual factors varied by ethnicity, safety, school budget, and teacher effectiveness were important factors for each parental group.

Parental satisfaction and performance are important elements for assessing the success of schools overall. However, there are several limitations with examining performance and parental satisfaction alone. First, parents may not be fully knowledgeable about their child’s experiences, and parental knowledge could decrease with a child’s age as the child becomes more independent. There are also limitations with measuring parental satisfaction through surveying. There may be a large number of parents who are indifferent in how they feel about their child’s school, but the survey results report results from parents with strong opinions. This is a common problem with any survey method, and as a result, parental satisfaction should not be the only metric used to evaluate school success. Likewise, student performance should not be the only metric used to evaluate school success. Student performance considers math and reading test scores, but there are other factors important for student learning and development such as extracurricular activities and a safe and encouraging environment.

By examining research from charter school participation and parental satisfaction and consulting economic theory behind charter schools as an institution, it is clear that charter school success cannot be determined by one metric alone. Rather, a variety of factors must be considered and measured at both regional and aggregate levels. Furthermore, discussing charter school performance in tandem with parental satisfaction and economic structural incentives gives a more well-rounded analysis of the ways charter schools influence teachers, parents, and students, each of whom play an important role in the education system.


This post meets the Economic major’s learning objectives in the following ways:

  1. Correctly applies microeconomic reasoning and models to individual and market behavior by:
    • Examining research on charter school success and marginal performance across several dimensions
  1. Correctly applies knowledge of economic theory, economic institutions and cultural values to the formation and analysis of public policy through:
    • Discussing ways in which charter schools provide competition and structure incentives as an institution and addresses potential selection bias
  1. Applies basic mathematical skills, quantitative methods and econometric tools to analyze models, quantify empirical relationships, and test hypotheses by:
    • Examining regression results and data from two studies on charter school performance and parental satisfaction
  1. Describes current national and international economic conditions and events by:
    • Immediately discussing the current relevance, charter school participation trend, and Trump’s budget proposal





Examining Economic Theory and the Empirics Behind US Charter School Performance and Parental Satisfaction