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? Public School Independent School Religious School Home School Mother’s education: High school 6 1 2 0 BA degree31393833 Family income: <$20K12 5 7 8 $20K-$60K43263956 $60K-$100K29244325 >$100K16451211 Ethnicity: Asian7.35.95.31.9 Hispanic8.03.18.22.5 African-American10.13.85.72.7 Any faith:53376742 Baptist faith:115718

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 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

8. SES effects on SAT by school type

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