Private Schooling: The US Context

Susan DynarskiUniversity of Michigan &

National Bureau of Economic Research

1990 2007

Number Private Schools 24,700 27,500% Schools Private 23% 26%% Students in Private 12% 11%

Source: Digest of Education Statistics 20097

More Private Schools, Declining Share of Enrollment

What is a Private School in the US? Funding is private

Parents pay tuition Schools may have endowments Religious schools traditionally subsidized by

church

Control over the school is private Schools set curriculum Students do not have to take state tests Minimal state control

Half of Private Schools are Catholic

Dollars Pounds

All Private $8,549 £5,728Catholic $6,018 £4,032Other Religious $7,117 £4,768Non-Sectarian $17,316 £11,602

Source: Digest of Education Statistics 2009 Table 59

Average Tuition Prices, 2007-08

Fewer Racial Minorities in Private Schools

Cheaper by the Dozen:Using Sibling Discounts at Catholic Schools

to Estimate the Price Elasticity of Private School Attendance

Susan Dynarski Jonathan Gruber Danielle LiMichigan & NBER MIT & NBER MIT

Previous Literature Extensive research on effect of private schools on outcomes

Students in private schools have higher scores, more likely to complete secondary school and go to university

But little research on price sensitivity of private school attendance Hard nut to crack E.g., we may see private enrollments highest where tuition is

highest Does this mean higher tuition prices increase enrollment? No! High demand for private schools higher prices Low demand for private schools lower prices

Exhibit 1 Example of Sibling Discounts

Two Schools in Columbus, Ohio Diocese School names are altered

Some Helpful Price Variation:Sibling Discounts

Exploiting Sibling Discounts There is variation in tuition costs

1. across neighborhoods2. across family sizes (2 kids cost more than 1)3. within neighborhoods across family sizes

We focus only on the last source of variation in prices

What do we find?

Increase tuition prices by 25% decrease in private enrollment of 5.2%

Elasticity: -0.22

Heterogeneity in Effects What types of families are most sensitive

to price? Answer determines how a voucher would alter

sorting across public and private schools

We find that prices matter most for parents who are Nonwhite Less educated

Charter Schools: A Public/Private Hybrid What are they?

Funding like public schools Freedoms like private schools

Curriculum, teacher hiring Enrollments

1990: zero 2010: 3.2%

Research shows oversubscribed schools large, positive effects on achievement Especially poor, nonwhite