Chapter 7: Weighted Student Funding and the Incentives of Charter Schools

In this chapter I consider links between the supply of charter schooling options and school funding systems that are weighted to provide additional resources to schools enrolling students with costlier educational needs. First, I review the evidence on how charter school operators decide where to locate their schools and which students to enroll in them. Then I study the adoption of a school funding system in California that increased revenues for schools enrolling higher-need students. I find suggestive evidence that these larger funding weights increased the rate at which charter schools enrolled low-income students, particularly among charter schools initially enrolling low-income students at relatively low rates. This may indicate that some charter schools engage in cream skimming behavior but also that such behavior can be mitigated by appropriately weighted school funding systems.