If you didn't see them when they came out, I strongly recommend you take a minute a read those two reposts (Selection effects on steroids and Selection on Spinach*). This is a big, incredibly complex story and it makes much more sense if you come in with some context.
I also want to say explicitly that I am not singling out the Angrist paper for criticism. It is, if anything, above average for the field; that's the scary part. I have a number of concerns about this study but they are all problems that you find in much, if not most of the research on charter schools.
Let's start with attrition and this passage from the paper. The first half of the paragraph mostly seems to be pretty good, except for one red flag [emphasis added].
A second potential threat to the validity of lottery-based estimates is the differential loss to follow-up between winners and losers (also called differential attrition). Students in our study are lost to follow-up if they are missing the MCAS score data we use to measure charter achievement effects. This usually happens when a student moves out of state or to a private school. Attrition can bias lottery-based estimates if different types of students are more likely to leave the sample depending on lottery results.There are a couple of fairly subtle points here (since I'm not an expert on this research you might want to dig up a copy of the original paper -- I believe mine is behind a firewall -- and check my work). The first centers around the various reasons why a student might miss one or more standardized tests. The researchers do deserve some credit for mentioning the private school option but the don't seem to quantify it, nor do they mention reasons like changing schools which are much more likely than interstate moves to interact in a problematic way.
Easier to miss but far more important is the defining of attrition as leaving the data set rather than leaving the program. This isn't necessarily wrong but it's incomplete and worrisome in at least two ways: first because it differs from what we might call the standard definition. If you Google "charter school student attrition," you will generally find stories about students leaving charter schools and moving to other schools; second because the more common definition of attrition is far more likely to cause problems that can invalidate this study.
The rest of the paragraph is more troubling.
For instance, losers might be more likely to leave than winners, and highly motivated students might be more likely to opt for private school if they lose. We therefore compare the likelihood that winners and losers have an outcome test score in our data. There are no statistically significant differences in follow-up rates in the lottery sample schools, a result documented in Appendix Table A3. It therefore seems unlikely that differential attrition has an impact on the lottery-based results.That "seems unlikely" is very hard to justify. Putting aside for a moment, the issue of definitions, you can't control for differential attrition this way. It is entirely possible for two groups to have roughly the same level of attrition and yet have the selection effects going in opposite directions. Furthermore, the kind of highly selective attrition we're talking about here is very powerful (particularly if you throw in peer effects). Even if the selective attrition is limited to one group, it is entirely possible for a statistically insignificant difference in attrition rates to led to a substantial difference in outcomes.
(Perhaps it is just a coincidence but it seems that, as economists have played more and more the role of statisticians-at-large, we seem to be seeing more of these "don't worry, everything will balance out" assumptions.)
I want to be careful with the next part because as mentioned before, I'm not an expert in this field nor have I gone through the paper in great detail, but think about the following line from the paper:
"The effects of charter attendance are modeled as a function of years spent attending a charter school."
Keep in mind that we appear to have a lot of cases of charters (particularly those with the 'no-excuse' model) singling out out students who are likely to do poorly and either forcing them out of the program or encouraging them to leave voluntarily. This probably means that a lot of students who would have been low-score/high-charter-years had they stayed where they were assigned by the lottery have been shifted to the the low-score/low-charter-year category.
This isn't my biggest concern with this research -- it isn't even my second biggest -- but it is enough to potentially undermine the validity of the research.