1. Economics of Home-Schooling Clive Belfield National Center for the Study of Privatization in Education www.ncspe.org

2. 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)

3. 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

4. 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)

5. Who home-schools?

6. 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

7. SAT premia vs. public school students Effect Size VerbalMath Independent schools 0.1750.135 Religious schools 0.085-0.005 Home schoolers 0.190 -0.045 Equation controls for personal, family, home, community, higher education characteristics

8. SES effects on SAT by school type

9. SES effects on SAT by school type

10. Conclusions • Economic implications • Niche preference • General option for some time period • Educational implications