Association for Public Policy Analysis & Management

Many urban school districts are undergoing a decentralization process by increasing the number of charter schools.  In theory, charter schools will provide healthy competition for traditional public schools, while offering expanded options for parents.  However, decentralization can also mean that broad social goals of education are neglected relative to the goals of individual schools.  In addition to meeting the requirements of compulsory education laws, school districts provide numerous other educational, enrichment, and support services.

In this study, we investigate how the growth of charter schools in a district affects the supply of optional services by examining the changing supply of pre-kindergarten classes (pre-k) in New Orleans as the district transitioned from a centralized system to one dominated by independently managed charters. Louisiana school districts and charter schools can opt into offering state-subsidized pre-k. Subsidies are available only for low-income and special-needs students, and the per pupil subsidy level is far below the average cost of a pre-k student.  In this setting, charter school pre-k will be offered only where operators perceive a benefit that exceeds the gap between average cost and state subsidies.  In this study, we explore two research questions related to pre-k in a decentralized system: Has decentralization limited or expanded public pre-k offerings? And do schools incur a competitive advantage by offering pre-k?

First, we use public school enrollment data from the Louisiana Department of Education from 2000-01 through 2012-13 to identify the number of pre-k slots allocated to each district in each year and the number of students enrolled, adjusting for demographic shifts that took place as a result of Hurricane Katrina.  We next explore the motivation for charter schools to provide pre-k in a system of school choice by estimating the effects of providing pre-k on schools’ student demographics, retention, and performance. 

Preliminary results suggest that the transition of public schools to private charter management was accompanied by significant reductions in total pre-k enrollment relative to kindergarten enrollment in New Orleans.  This is not explained by statewide or local trends, as the total allocation of pre-k subsidies to New Orleans remained constant, the local supply of private pre-k remained stable, and public pre-k was expanding statewide.  Instead, these results suggest that schools under charter management were less likely to use their allocated pre-k subsidies.  At the same time, a handful of New Orleans charter schools were adding pre-k slots through both subsidies and parent tuition. We find that students who enroll in pre-k at these schools have lower transfer rates in early elementary grades and higher third-grade test scores than students who enroll in kindergarten at a school with or without pre-k, suggesting that in this school-choice setting, offering pre-k is a competitive strategy for charter schools to improve recruitment, retention, and performance on state tests.