School choice policies are increasingly prevalent across the United States. Charter schools operate in all but nine states and voucher, magnet, and open enrollment policies offer some degree of school choice to students across a diverse range of states.  While the debate over the effectiveness of such reforms in increasing student performance continues, to date those discussions have focused largely on urban and heavily populated suburban areas.  This has left lingering and important questions as to the impact of these policies in other locales unanswered.  Just as there is often restricted access to health care, cultural amenities, and alternative employment opportunities, rural areas generally offer parents significantly fewer options with respect to schooling.  It is not just the lack of access to charter schools or private alternatives to the public system, but rural areas also have fewer traditional public schools within a given geographic distance simply because population density is lower.  This lack of alternatives implies that reform efforts based on school choice may have limited appeal to policymakers concerned with outcomes in rural schools. 

This paper examines a largely rural state to consider whether the structure of the public school districts influences performance.  Kentucky operates 174 school districts, or one district for every 3,868 students.  While most districts are coterminous with counties, 54 of Kentucky’s districts are classified as independent.  Independent districts are generally much smaller than traditional school districts, serving approximately a third as many students on average and operating fewer schools.  These districts typically operate in a central city within a county, thereby offering local parents the opportunity to choose between the schools operated by the traditional and independent district.

Drawing on data from schools across Kentucky districts, our research poses a fundamental question about the relationship between academic quality and competition among districts and schools driven by Tiebout choice.  We estimate models of student outcomes as a function of geographic location of school and district as well as the structural composition of nearby alternatives, focusing particularly on the performance of counties with independent districts to those without the independent districts.  Our preliminary results indicate modest advantages to learning in the independent districts, which may be functioning in the same way that charter or other choice-based alternatives operate in other states.