Charter Schools and Labor Market Outcomes

We estimate the impact of charter schools on early-life labor market outcomes using administrative data from Texas. We find that, at the mean, charter schools have no impact on test scores and a negative impact on earnings. No Excuses charter schools increase test scores and four-year college enrollment, but, due to imprecision, have a statistically insignificant impact on earnings. The coefficient is almost identical to what we would expect given the correlation between test scores and wages. Other types of charter schools decrease test scores, four-year college enrollment, and earnings, and, surprisingly, the decrease in wages is more negative than one would anticipate. Using school-level estimates, we find that charter schools that decrease average test scores also tend to decrease earnings, while charter schools that increase average test scores have no discernible impact on earnings. In contrast, high school graduation effects and four-year college enrollment are predictive of earnings effects throughout the distribution of school quality. The paper concludes with a speculative discussion of what might explain our set of facts.