Economics of Home-Schooling

Clive BelfieldNational Center for the Study of

Privatization in Educationwww.ncspe.org

Ultimate form of privatization

Private provision, funding, and regulation

Legalized in 1980s-90s

Enrollment risen to ≈0.8-1.04 million students (1.7-2.2% of all students)

Home-schooling on average 2 years (home-based education)

Economic implications

Affordability Intergenerational transfer

Expenditure patterns Time allocations within the family Labor force participation Housing decisions Tiebout sorting (preferences for other

government-provided amenities) Signaling to firms

How can families afford it?

Opportunity cost: Compare to public and private school

Additional cost items Cost items with economies of scale

Cost items with low economies of scale Savings Invisible funding (cyber schooling)

Who home-schools?

Public

School

Independent School

Religious

School

Home

School

Mother’s education:

High school 6 1 2 0

BA degree 31 39 38 33

Family income:

<$20K 12 5 7 8

$20K-$60K 43 26 39 56

$60K-$100K 29 24 43 25

>$100K 16 45 12 11

Ethnicity:

Asian 7.3 5.9 5.3 1.9

Hispanic 8.0 3.1 8.2 2.5

African-American 10.1 3.8 5.7 2.7

Any faith: 53 37 67 42

Baptist faith: 11 5 7 18

Intergenerational transfers

Hypothesis: Family background effects on academic

achievement will be stronger for home-schoolers than for students in other types of school

Test: Comparisons of coefficients on family

background in achievement equations across school type

SAT premia vs. public school students

Effect Size

Verbal Math

Independent schools 0.175 0.135

Religious schools 0.085 -0.005

Home schoolers 0.190 -0.045

Equation controls for personal, family, home, community, higher education characteristics

SES effects on SAT by school type

20

40

60

80

vh/v

i/vp/

vr

1 2 3 4SES

Home Ind PubRel

SATV Premium f or SES Quintiles

10

20

30

40

50

60

mh/

mi/m

p/m

r

1 2 3 4SES

Home Ind PubRel

SATM Premium f or SES Quintiles

SES effects on SAT by school type

20

40

60

80

vhb/

vib/

vpb/

vrb

1 2 3 4SES

Home Ind PubRel

Baptists

0

20

40

60

80

mhb

/mib

/mpb

/mrb

1 2 3 4SES

Home Ind PubRel

Baptists

Conclusions

Economic implications Niche preference General option for some time period

Educational implications