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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