Private schools and school enrollment in Chicago

Chicago Fed Letter, Oct 2006 by Sander, William

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.

Although the private share in basic education in Chicago has been declining, partly as a result of Catholic school closings, 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 population 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 whether private schools increase academic achievement. The payoffs to educational attainment have been high and rising along a number of dimensions, including lifetime earnings and health. Accordingly, there have been many recent policy initiatives to enhance educational attainment through reform and financing of U.S. schools, including bolstering 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 examine 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 Statistical 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 outcomes, it is necessary to understand what determines the decision to attend private schools. For example, some of the reasons that families choose private schools, other than the schools' performance per se, may also affect educational outcomes. And so, an understanding of the private-public school choice will help distinguish the possible causes of educational outcomes.

Some of the factors that have been found to affect private school attendance are as follows. Catholic religion and Catholic religiosity as measured by church attendance have large effects on Catholic school attendance. Evangelical Protestants are also more likely to send their children to private schools. In general, families with stronger religious views are more likely to opt for faith-based schools. Religious schools account for over 80% of the enrollment 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 important factor: The demand for private schools is higher where the quality of public education is lower. Further, studies 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 determine the selection of private schools, such as ability of students and family values (e.g., the religiosity of parents). Since the Coleman studies, many researchers have examined the effects of private schooling, trying to control for unobserved selectivity in the private school sector. An important study of this type by Derek Neal at the University of Chicago found that after controlling 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 positive effect in inner cities. In a previous study, I also found a large positive Catholic school effect on educational attainment for minorities in inner cities and no effect for whites in suburban areas.4