Do Profits Incentivize Academic Performance? Estimating the Relationship Between Profit Status and Student Test Scores in Charter Schools

Abstract

Roughly one-quarter of all charter school students in the U.S. attend a school managed by a for-profit management organization. Limitations in the scope of previous research prevent researchers from understanding whether for-profit charter schools perform better or worse in student test score achievement nationally compared to nonprofit charter schools, and economic theory provides competing answers on what we should expect. I expand the temporal and geographic scope of the previous literature to incorporate school-level test score measures from seven states and a more recent time period. Using OLS regression, I find no difference in the average test score achievement of students in for-profit charter schools relative to nonprofit charter schools. These results confirm the suggestions of previous research.