The Competitive Structure of Urban School Districts in the United States

Abstract

We advance an industrial-organization-style measure of the competitiveness of urban public school districts. We find that a majority of the American urban population can choose among at least four school districts. Tiebout choice is a realistic option for most Americans. However, there is substantial variation in the extent of this choice. The most competitive regions are large Urbanized Areas (UAs) in the Northeast and North-Central United States. Smaller UAs are less competitive in this respect. Two regions of the country have much less Tiebout choice: the South and the arid West. Both can be accounted for by scale economies of the past. In the arid West, rural densities were low, which necessitated larger areas to achieve graded schools when one-room school districts started becoming obsolete early in the twentieth century. In the South, segregated schools were a diseconomy of scale that also required larger districts to achieve graded schools for whites and, later on, for blacks. These arguably oversize school districts persist because of the political and legal difficulties in breaking up school districts.