Abstract
Many school choice advocates argue that in order to improve public education, public schools should be subjected to market forces such as competition. This study looks at the effect of growing populations in charter schools, one source of competition for traditional public schools, on students that remain in traditional public schools. Of particular interest is the “hold harmless” policy that exists in Massachusetts, which provides public school districts several ‘buffer’ years to cope with the financial loss that accompanies students transferring to charter schools. Using Mathematics and English standardized test passing rates from 2007 to 2011 in five states- Connecticut, Massachusetts, New Jersey, New York, and Pennsylvania- and a pooled times series regression with fixed effects, the effect of charter competition on Traditional Public Schools and overall achievement is estimated. An increase in charter market share is shown to have a small yet significant positive effect on English passing rates in Massachusetts and New York, although whether or not this is due to the “hold harmless” policy cannot be determined.