Racial Discrimination in Charter Schools: A Large-Scale Field Experiment Exploring the Causal Mechanism of Discrimination

Much of the literature that deals with cream-skimming/ cropping of charter schools is concerned with adverse student selection procedures. Arguably, there are different mechanisms through which charter schools can select prospective students. At the initial stage of the enrollment process, parents seek information on how to enlist their kid in school, including where and how to apply for a lottery if there exists one. At this stage, administrative burdens in accessing relevant information can be increased. Indeed, the availability of information is a crucial criterion for parents to learn about schools of choice and subsequently apply to them. But why would charter schools select certain types of students by increasing administrative burdens (i.e., learning and compliance costs)?

Charter schools are privately managed schools that compete for students with traditional public schools. More than public district schools, they are subject to competitive pressures to sustain on the educational marketplace. We predict that charters will prioritize students who they perceive easier-to-serve and therefore less costly. In addition, the No Child Left Behind Act performance regime induces incentives to focus on students that will meet bureaucratic success criteria like high standardized test scores. Charters are hence under double-pressure to sustain economically while at the same time they need to meet performance targets in terms of students’ academic achievements. It is therefore reasonable to expect that charter schools have developed an inherent incentive structure that leads them to focus on an easier-to-serve clientele.

Direct signals about the future performance and/or costliness of prospective students are often not available during initial information requests send to charter schools. This is the first entry point for unequal treatment. Drawing on the statistical discrimination framework, we argue that charter schools instead use imperfect signals of students’ future performance and costliness. This means that in the absence of direct information, charter school principals will draw on population-based inferences about the average performance/ costliness of members of certain racial/ethnic groups, and use this population-specific statistical knowledge as a stereotype against individual applicants. As a consequence, racial/ethnic groups who are perceived to perform less well on average academically and hence potentially being costlier (like African-Americans and Latinx) will be discriminated against in accessing charter schools.

To test these theoretical predictions, we will send out information requests to all charter school principals in the US in January 2020. In the study, we will experimentally vary the race of putative senders as well as ‘cost criteria’ of hypothetical students. Crossing these experimental factors allows us to explore the mechanism of frontline discrimination by testing whether charter school principals engage in statistical discrimination as a means of cream-skimming. In addition, we expect heterogeneity in discrimination among charter schools based on their degree of market-orientation and overall educational mission. For instance, private for-profit schools that cater academically strong students will be more likely to discriminate against students they perceive as costly on the basis of test scores compared to nonprofit schools that focus on vulnerable students.