How does it work? High-risk youths spread out over more schools rather than being concentrated in a few bad schools. If peer effects work with thresholds or if there are increasingly negative peer effects as concentrations of high-risk kids increase, this makes a lot of sense.
Lessons for us in New Zealand?
- The lottery design in North Carolina resulted in higher-risk youths being more, not less, likely to flip into competitive schools. This cuts against arguments that school choice and charters necessarily result in pools of worse kids left behind.
- The gains from moving to charters here might be rather more extensive than just educational outcomes. This is also consistent with evidence from things like the Perry Preschool project where educational outcomes washed out over time but social outcomes, like crime reduction, persisted.
Here's an ungated working paper version.