Direct and indirect impact of charter schools' entry on traditional public schools: New evidence from North Carolina

•Estimate the causal impact of school choice programs on student achievement.•Separately identify direct impact and indirect impact at the grade level.•Find a positive and significant direct impact on student achievement.•Demonstrate such positive effects were significantly undervalued in the literature.

This paper examines the effects of charter schools on student achievement at neighboring traditional schools. The study shows that charter school entry does not induce indirect impact on non-overlapping grades but generates positive direct impact on overlapping grades. I also demonstrate that such positive effects would have been significantly undervalued in prior studies, since they do not distinguish between the two impacts.