Does enrollment in private school increase educational attainment? After reviewing some research on national trends concerning private (versus public) schooling, the author examines how private school options in the Chicago metropolitan area might affect academic achievement for various demographic groups.Education - Middle West - Chicago (Ill.) ; Education

William Sander

English

Research Papers in Economics

Chicago Fed Letter
Private schools and school enrollment in Chicago
by William Sander, professor of economics, DePaul University, and consultant, Federal Reserve Bank of Chicago
Does enrollment in private school increase educational attainment? After reviewing
some research on national trends concerning private (versus public) schooling, the
author examines how private school options in the Chicago metropolitan area might
affect academic achievement for various demographic groups.
ESSAYS ON ISSUES THE FEDERAL RESERVE BANK OCTOBER 2006
OF CHICAGO NUMBER 231
City size
rank City Private
(percent)
1N e w  Y o r k 1 8
2 Los Angeles 11
3 Chicago 17
4 Houston 8
5 Philadelphia 21
6 Phoenix 7
7 San Diego 7
8 Dallas 10
9 San Antonio 8
10 Detroit 8
SOURCE: U.S. Census Bureau, 2003, 2000 Decennial
Census of Population and Housing, Washington, DC.
1. Private high school share, by city
Although the private share in basic ed-
ucation in Chicago has been declining,
partly as a result of Catholic school clos-
ings, Chicago still educates a relatively
high percentage of its children in private
schools. In 2000, the City of Chicago
ranked third among the ten largest cities
in the United States in the percentage
of high school students attending private
schools, behind Philadelphia and New
York City (figure 1). Chicago ranked
seventh out of the 50 largest cities. About
two out of three private school students
in Chicago attend Catholic schools. At
the national level, about one out of ten
students attend private grade schools
and high schools. About half of this pop-
ulation is enrolled in Catholic schools.
Over time, the private share in education
has remained at about 10%, although
the Catholic share of this population
was much higher in the past—about
90% in 1960.
One of the important issues in economic
research and education policy is wheth-
er private schools increase academic
achievement. The payoffs to educational
attainment have been high and rising
along a number of dimensions, includ-
ing lifetime earnings and health. Ac-
cordingly, there have been many recent
policy initiatives to enhance educational
attainment through reform and financ-
ing of U.S. schools, including bolster-
ing the ability of low-income families
to choose private schooling. In this
Chicago Fed Letter, I review some of the
academic evidence on private schooling
and educational achievement. I also ex-
amine private schooling in the Chicago
metropolitan area and its possible effect
on school enrollment. For the purposes
of this article, the Chicago metropolitan
area is defined as the City of Chicago and
suburbs of Chicago within Illinois (called
the Chicago Primary Metropolitan Statis-
tical Area by the U.S. Census Bureau).
Literature: A thumbnail sketch
Most of the studies on private schools
have focused on Catholic schools. One
reason for this is that Catholic schools
have accounted for the largest share of
the private school sector. Existing data
sets are often too small to estimate the
effects of other types of private schools,
such as Jewish schools or independent
nonsectarian schools.1
To address whether private schooling
produces superior educational out-
comes, it is necessary to understand what
determines the decision to attend private
schools. For example, some of the rea-
sons that families choose private schools,
other than the schools’ performance
per se, may also affect educational out-
comes. And so, an understanding of
the private–public school choice will
help distinguish the possible causes of
educational outcomes.2. Private school enrollment, by demographics
City of Chicago Suburbs of Chicago
Age White Black Hispanic White Black Hispanic
( - - - - - - - - - - - - - - - - - - percent - - - - - - - - - - - - - - - - - - )
12 48 8 10 15 8 7
13 45 12 12 15 9 9
14 46 8 10 13 8 6
15 49 9 16 13 6 6
16 44 8 17 11 7 9
17 51 9 16 12 6 8
18 59 11 23 19 11 8
SOURCE: U.S. Census Bureau, 2003, 2000 Decennial Census of Population and Housing,
Washington, DC.
Some of the factors that have been
found to affect private school atten-
dance are as follows. Catholic religion
and Catholic religiosity as measured
by church attendance have large ef-
fects on Catholic school attendance.
Evangelical Protestants are also more
likely to send their children to private
schools. In general, families with stron-
ger religious views are more likely to
opt for faith-based schools. Religious
schools account for over 80% of the en-
rollment in private schools nationwide.
Economic variables, including family
income and parents’ education, usually
increase the probability of attending
private schools, while private school
tuition has a negative effect. The quality
of public schools in proximity to the
home has also been shown to be an im-
portant factor: The demand for private
schools is higher where the quality of
public education is lower. Further, stud-
ies show some evidence of “white flight”
to private schools as the percentage of
blacks in public schools increases.
Influential studies on the effects of
Catholic and other private schooling
were published by Coleman, Hoffer,
and Kilgore in 1982 and Coleman and
Hoffer in 1987.2 These studies indicated
that Catholic schools increased academic
achievement and educational attainment
for those enrolled in them. However,
the studies were controversial because
they did not adequately control for the
possibility that Catholic school effects
were driven by unobserved variables,
including those things that often deter-
mine the selection of private schools,
such as ability of students and family
values (e.g., the religiosity of parents).
Since the Coleman
studies, many research-
ers have examined
the effects of private
schooling, trying to
control for unob-
served selectivity in
the private school
sector. An important
study of this type by
Derek Neal at the
University of Chicago
found that after con-
trolling for selectivity,
Catholic schools had a large positive
effect on high school graduation rates
for minorities (blacks and Hispanics)
in inner cities.3 For non-Hispanic whites,
Neal found no Catholic school effect
in suburban areas and a modest posi-
tive effect in inner cities. In a previous
study, I also found a large positive
Catholic school effect on educational
attainment for minorities in inner cit-
ies and no effect for whites in subur-
ban areas.4
Studies have also tried to find and mea-
sure any effects that private schools
exert on the quality of public schools
through competitive pressures. A review
of many of these studies suggests that
competition has a small positive effect
on the quality of public education.5
Harvard economist Caroline Hoxby
has been one of the leading exponents
of the view that private schools improve
the quality of public schools through
competitive pressures.6
Evidence from Chicago
What are the private school options
available in Chicago, and how can we
draw on existing data to throw additional
light on the possibility that private school
options might affect educational attain-
ment? Recent data have been compiled
from the 5% Public Use Micro-data
Sample (PUMS) from the 2000 Decennial
Census of Population and Housing. The
PUMS data are derived from samples
of areas (called Public Use Micro-data
Areas, or PUMAs) that have a population
of at least 100,000. Figure 2 shows these
data on private school enrollment, by
age, race, ethnicity, and location, in the
Chicago metropolitan area. The data
indicate that roughly half of non-Hispanic
whites in the City of Chicago attend
private schools. This is not the case in
suburban areas where private school
enrollment rates are about 15% for 12
and 13 year olds and about 11% or 12%
for high school students. Private school
enrollment rates generally increase for
18 year olds in both the City of Chicago
and the suburban areas because part of
this group has started college. Of the
whites enrolled in Catholic schools in
the Archdiocese of Chicago, almost all
(95%) are Catholic.
For blacks in the City of Chicago, private
school enrollment rates range from 8%
to 12%; rates are slightly lower in subur-
ban areas for blacks. One of the reasons
for lower enrollment rates for blacks in
private schools is that private schools in
the Chicago area are mostly Catholic,
while blacks are mostly Protestant. Of
the blacks enrolled in Catholic schools
in the Archdiocese of Chicago, three
out of four are not Catholic.
For Hispanics in the City of Chicago, pri-
vate school enrollment rates range from
about 10% to 12% for the youngest ages
and increase to about 16% or 17% for
high school students; rates in the suburbs
are less than 10% for Hispanics regard-
less of age. Almost all of the Hispanics
who are enrolled in Catholic schools
are Catholic.
Data on school enrollment rates, by age,
race, ethnicity, and location, are present-
ed in figure 3. The data indicate that
98% to 99% of non-Hispanic whites are
enrolled in school in both the City of
Chicago and suburbs of Chicago from
the ages of 12 through 16. For 17 year
olds, enrollment rates for whites de-
cline by 5 percentage points in the City
of Chicago and 3 percentage points in
suburban areas.
Among blacks, 98% to 99% are enrolled
in school through the age of 15. There-
after, enrollment rates decline to about
90% at age 17 in the City of Chicago
and 93% in the suburbs of Chicago. En-
rollment rates fall off more dramatical-
ly for blacks at age 18 relative to whites
in both the City of Chicago and the
suburban areas.Michael H. Moskow, President; Charles L. Evans,
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Evanoff, Vice President, financial studies; Jonas Fisher,
Economic Advisor and Team Leader, macroeconomic
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policy research;  William Testa, Vice President, regional
programs and Economics Editor; Helen O’D. Koshy,
Kathryn Moran, and Han Y. Choi, Editors; Rita
Molloy and Julia Baker, Production Editors.
Chicago Fed Letter is published monthly by the
Research Department of the Federal Reserve
Bank of Chicago. The views expressed are the
authors’ and are not necessarily those of the
Federal Reserve Bank of Chicago or the Federal
Reserve System.
© 2006 Federal Reserve Bank of Chicago
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3. School enrollment, by demographics
City of Chicago Suburbs of Chicago
Age White Black Hispanic White Black Hispanic
( - - - - - - - - - - - - - - - - - percent - - - - - - - - - - - - - - - - - - )
12 99 99 99 99 99 97
13 99 99 97 99 99 98
14 98 98 98 99 99 96
15 99 98 95 99 99 95
16 98 97 86 98 96 86
17 93 90 78 95 93 76
18 82 63 61 80 67 51
SOURCE: U.S. Census Bureau, 2003, 2000 Decennial Census of Population and Housing,
Washington, DC.
Although Hispanic enrollment rates are
slightly less than white and black enroll-
ment rates at younger ages, they start to
fall off more dramatically after age 15. By
the age of 17, over 20% of Hispanics are
not enrolled in school in the City of
Chicago and almost 25% are not enrolled
in the suburbs of Chicago. Enrollment
rates for Hispanics are about the same as
for blacks at age 18 in the City of Chicago;
only one in two Hispanics are enrolled in
school at age 18 in the Chicago suburbs.
Statistical estimates
I conducted statistical (probit) estimates
of the probability that respondents age
15–17 were not enrolled in school (called
the dropout rate). This procedure allows
one to test whether private schools might
have a significant effect on school en-
rollment rates in the Chicago region
after controls are made for other back-
ground factors. The private school vari-
able is defined as the percentage of
grade school and high school students
in the area in which they live (PUMA)
that attended a private grade school or
high school in 2000. The additional
adjustments that are made to estimate
dropout rates include household income,
the householder’s (parent’s or guard-
ian’s) education, whether the respon-
dent lived in a married-couple household,
gender, age, race/ethnicity (black and
Hispanic), whether the sample area was
in the City of Chicago, and average house-
hold income in the sample area. Estimates
were undertaken for all teens age 15–17
and by race and ethnic background.
For all respondents, a one standard devi-
ation increase in the percentage attend-
ing private schools would reduce the
dropout rate of 5.4%
by a very modest 0.3
percentage points. It
was also found that
males and Hispanics
were more likely to
drop out, while re-
spondents from more
affluent and highly
educated households
were less likely to drop
out of school. For non-
Hispanic white respon-
dents, the percentage
attending private schools did not affect
the dropout rate of 2.6%.
The results for blacks and Hispanics both
indicated a more substantial negative
relationship between the percentage
attending private schools and the drop-
out rate. For blacks, a one standard devi-
ation increase in the percentage of blacks
in private schools (about 3 percentage
points) would reduce the dropout rate
of 5.7% by about one-sixth. Another
way to look at this relationship is that if
blacks attended private schools at about
the same rate as non-Hispanic whites
in the metropolitan area, private schools
would be associated with reducing the
black dropout rate by about one-half.
For Hispanics, the negative relation-
ship between private school enrollment
in an area and the dropout rate was
even more substantial. A one standard
deviation increase in the percentage
of Hispanics attending private schools
(about 5 percentage points) would be
associated with reducing the dropout
rate of 13.3% to about 10.8%.
Conclusion
Although the vast majority of students
in suburban schools graduate from high
school, with a high percentage going on
to college, this is not the case in the City
of Chicago. In a recent study, the four-
year high school graduation rate in pub-
lic schools in Chicago was estimated at
only 54%.7 Although the high school
graduation rate is low in many large cities
in the United States, the rate in Chicago
is lower than in many other large cities.
For example, in a study of the largest
public school districts in the United
States, the 2001–02 graduation rate was
estimated at 51% for Chicago, while it
was 66% for New York City and 59%
for Philadelphia.8
Apart from whether private schools in-
crease test scores, they have been shown
to be successful in keeping students in
school. For example, data from the
Catholic Archdiocese of Chicago indi-
cate that 97% of students in Catholic
schools, which disproportionately serve
low-income minority students, graduate
from high school. Data from the 2000
Decennial Census of Population and Housing
that have been analyzed here and other
studies suggest that private schools in
the Chicago metropolitan area probably
increase school enrollment rates for black
and Hispanic students of high school
age, thus increasing the probability that
they will graduate from high school.
Over time, the percentage of students
attending private schools in Chicago
has declined. This is partly a result of
the decline in the number of Catholic
schools. Over the past 30 years, the num-
ber of Catholic schools in Chicago has
declined by about 50%. Student enroll-
ment in these schools has declined even
more—from about 132,000 in 1976–77
to about 52,000 in 2004–05.9 Since 1990,
the percentage of students attendingprivate schools in Chicago has declined
from about one in five to approximately
one in six. One of the possibilities this
raises is that fewer students might be
completing high school than would be
the case if more students had access to
private schools, especially students from
black and Hispanic backgrounds. An
additional outcome of this decline is
that the cost of public education has
increased more than would otherwise
be the case as more students have been
absorbed into public schools.
1 A recent phenomenon has been the growth
of hybrid public–private schools, often
called charter schools. These schools are
typically “chartered” by public entities and
paid for with public monies, but they re-
semble private schools in that they are less
bound in their organizational structure
by rules and regulations.
2 James S. Coleman, Thomas Hoffer, and
Sally Kilgore, 1982, High School Achievement:
Public, Catholic, and Private Schools Compared,
New York: Basic Books; and James S.
Coleman and Thomas Hoffer, 1987, Pub-
lic and Private High Schools: The Impact of
Communities, New York: Basic Books.
3 Derek Neal, 1997, “The effects of Catholic
secondary schooling on educational attain-
ment,” Journal of Labor Economics, Vol. 15,
pp. 98–123.
4 William Sander, 2001, Catholic Schools: Private
and Social Effects, Norwell, MA: Kluwer
Academic Publishers.
5 Clive R. Belfield and Henry M. Levin, 2001,
“The effects of competition on educational
outcomes: A review of U.S. evidence,”
Columbia University, Teachers College,
National Center for the Study of Privatiza-
tion in Education, working paper, No. 35,
available at www.ncspe.org/list-papers.php.
6 Caroline Minter Hoxby, 1994, “Do private
schools provide competition for public
schools?,” National Bureau of Economic
Research, working paper, No. 4978, Decem-
ber; and Caroline Minter Hoxby, 1996, “The
effects of private school vouchers on schools
and students,” in Holding Schools Accountable,
Helen F. Ladd (ed.), Washington, DC:
Brookings Institution Press.
7 Elaine Allensworth, 2005, Graduation and
Dropout Trends in Chicago: A Look at Cohorts
of Students from 1991 through 2004, University
of Chicago, Consortium on Chicago School
Research, report, January, available at
www.consortium-chicago.org/publications/
pdfs/p75.pdf.
8 Jeffrey Sable and Lee M. Hoffman, 2005,
Characteristics of the 100 Largest Public Ele-
mentary and Secondary School Districts in the
United States: 2002–03, U.S. Department of
Education, Institute of Education Sciences,
National Center for Education Statistics,
report, August, available at http://
nces.ed.gov/pubs2005/2005312.pdf.
9 Loyola University Chicago, Institute of Urban
Life, 1990, Chicago’s Private Elementary and
Secondary Schools, report; and Archdiocese
of Chicago, Office of Catholic Schools,
2005, Annual Report, Chicago.

Private schools and school enrollment in Chicago

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Private schools and school enrollment in Chicago

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