Scott Sumner  

What can school choice accomplish?

In praise of investor activism... Can YouTube Censor?...

I've always been a big fan of school choice, indeed I'd like to entirely abolish the public school system and move to 100% private education. Having public schools makes no more sense than having a public church.

At the same time, I've always been skeptical of arguments that school vouchers could dramatically boost test scores. Indeed I don't even believe that higher test scores are the proper goal of schooling---customer satisfaction is the proper metric. I favor giving people a choice because people generally prefer to have a choice.

I have made two arguments for school vouchers. First, a system of private vouchers can reproduce our current crappy test scores at a much lower cost to the government. And second, private schools are likely to provide a somewhat more enjoyable education experience than one-size-fits-all public schools. I hated school and probably would have hated it less if I'd gone to a school full of students with similar interests. I'd guess other students probably feel the same way, regardless of whether they are jocks or nerds.

Megan McArdle
had much higher hopes for school choice than I did, but now sees that vouchers won't perform miracles:

Between private efforts like Children's Hope Scholarships, and public voucher programs, we were finally going to get some choice into the educational marketplace. Like many of my fellow libertarians, I genuinely believed that this would be an economic and social revolution that would, over time, lift millions out of poverty and alleviate all manner of social ills.

Twenty years on, my optimism seems to have been far too exuberant. Some studies suggest that voucher programs do modest good; others suggest that they do very little; and a few suggest that the impacts are actually negative. My overall takeaway from the literature is that voucher programs probably do a little bit of good. But the emphasis is on the word "little"; they are not a cure-all, or even much of a cure for anything. It was reasonable to think, in 1997, that voucher programs could change the world. Now we have two decades of evidence.

I never thought it was very likely that school choice could lift millions out of poverty, as most poverty in America is not caused by poor quality schools.

The hope of school choice was that the worst-off kids could be given the same opportunities as those born with silver spoons in their mouths. But if what parents are most interested in is keeping their children away from those kids (at least in large numbers), that hope cannot be fulfilled. Improving the quality of instruction can make everyone better off; peer group, on the other hand, is a zero-sum game, where every child who improves their peer group must be counterbalanced by one who is pushed out.
Here I'm actually more optimistic than McArdle. I don't think rich people want their kids to attend school with other rich kids; I believe that parents want their kids to attend school with people of similar interests. Some kids are more interested in astronomy and others are more interested in high school football. Some parents want a "boot camp" school to discipline their out of control kids. This partly overlaps with class, but not entirely. We should have schools that cater to all types, so that the experience of education can be more enjoyable, or at least (in my case) less miserable. It's not a zero sum game.

We don't evaluate the quality of a Tesla by how fast it goes from zero to 60, we use the market test---do consumers want this car? Education is no different; the way to judge school quality is not test scores, it's consumer demand.

PS. One argument against school choice is that parents are not able to evaluate the quality of schools. I've never understood this argument, but I have an open mind. So here's the test I propose. Do a survey of 1000 Americans, from all walks of life. Give them a list of 30 colleges, including a bunch of Ivy League schools, a bunch of big Midwestern state universities, and a bunch of community colleges. Ask these average people to rank the schools in terms of academic quality. I'd guess that most rankings would be highly correlated with alternative rankings such as average SAT scores or the US News and World Report ranking.

PPS. McArdle's article is entitled "We Libertarians Were Wrong About School Choice". Kudos to McArdle for showing more class than most pundits, and admitting to changing her mind when new information came in. But I think that title is a bit misleading, as my argument for school choice is actually the more libertarian one (albeit not necessarily the better argument).

PPPS. I was going to do a post about how populism is not about economics, but Tyler Cowen beat me to it (and did a better job than I would have done.)

COMMENTS (25 to date)
Hazel Meade writes:

There was a survey paper posted on Marginal Revolution recently which showed that vouchers induce public schools to improve performance due to the competition from private schools. This may explain a lack of improvement in test scores of voucher students vs. public school students. Competition induces both to improve.

Tanstaafl writes:

I fully agree that the argument for school choice is exactly that, choice, i.e. more freedom, and any improvement of outcomes usuall the natural consequence.

I‘m still surprised about the lack of improvement, and your expectation of it. Public schools seem such a low bar to beat.

Are vouchers in the US maybe much less endowed than public schools?

Thomas Boyle writes:

It is competition and the risk of failure, not public/private differences, that should drive performance. In which case, public schools in voucher areas should be better than public schools in non-voucher areas, and the improvement should have happened since the voucher program was introduced.

Is that true?

Thomas Boyle writes:

McArdle says parents select for peer group rather than pedagogic quality, because peer group matters.

But her results apparently suggest that peer group does not matter...

Perhaps I'm missing something.

Matthew Moore writes:

' as most poverty in America is not caused by poor quality schools.'

Yes, the causation is the other way around (plus a few common causes).

Can you do a post on what you view the major causes as then?

Mark writes:

Thomas Boyle, I think Hazel' Meade's link helps answer your question about competition.

There was a paper awhile ago showing that, in the U.K., public hospitals' quality of care increased with the density of hospitals in the area because it meant they had to compete more to get patients, and funding was tied to patient load. State hospitals can't compete with each other in pricing, but they can in quality. It seems quite plausible that school choice induces the same kind of behavior in public schools.

It is of course likely that measurable increase in quality from school choice isn't as high as many hope. But I think there is an unavoidable political reality that it's easier to sell a policy to voters by saying 'we'll make your kids smarter' than saying 'we can't make your kids smarter because we can't change their genetics or force you to be better parents, so we'll make them just as smart but at a lower cost.'

John Hall writes:

I find almost all the discussion on vouchers to be frustrating. Do the voucher programs or charters get the same $ per student as public schools? No? Then you're not comparing apples to apples. If there's some evidence that the vouchers underperform, well maybe that they are getting 1/3 the funding has an effect. Who knows.

On your PS about parents evaluating schools, I'm sympathetic to the argument. I agree with the general thrust, though I think that parents use heuristics to a greater degree than your argument implies. Rich neighborhood, high property taxes, better schools. I doubt they are combing through SAT statistics for schools. That being said, I think "consumer demand" can get mixed up with grade inflation. If a school gives out more A's, then the parents might be happier, but that doesn't necessarily mean that the students are better educated. By itself, this isn't that big a deal, but it becomes a problem when grades are an input into the college acceptance. Thus, I think there's a benefit to some kind of quantitative evaluation of student academic quality that takes into account test scores and class-by-class performance, such as with an IRT model.

Mike writes:

Are you familiar with Gladwell's anecdote about the Penn State law school?

I think that the quality of a school may be a self-fulfilling prophecy. If parents think Harvard is better, they send the kids there then there's demand so SAT scores go up since more applicants etc.

But, what if George Mason could do a better job than Harvard?

Competition spurs the NEA/AFT/AFSCME cartel's facilities (the "public schools") to improve. Bureaucrats are not suicidal. Search J. P. Greene's blog for "systemic effects of vouchers".

It does not take 12 years at $12,000 per pupil-year to teach a normal (IQ 100+) child to read and compute. Vouchers reduce the incentive for system insiders to demand ever-increasing budgets and an ever-expanding span of compulsory institutionalization. Newark, NJ and Washington, DC schools spend over $25,000 per pupil-year and deliver a wretched result.
Compulsory attendance laws, tax support of school, minimum wage laws, and child labor laws put on the job training off limits to most children.

Scott Sumner writes:

Everyone, Don't overlook the budgetary considerations. Vouchers can produce large cost savings, relative to public schools. Given how much we spend on public education, that's a very big deal. Much more important than test scores.

Scott Sumner writes:

Malcolm, Good comment.

Michael Byrnes writes:

Scott said:

Indeed I don't even believe that higher test scores are the proper goal of schooling---customer satisfaction is the proper metric.

This suggests (not begs!) the questions:

1. Who is the customer? The student or the parents? Is the answer different for a first grader vs a 10th grader?

2. What determines satisfaction? Must 'satisfaction' include educational attainment of the student? Can it include 'de facto segregation'? the teaching of 'young earth creationism' as scientific fact?

Kevin Erdmann writes:

1. If people aren't capable of knowing which schools are good, I wonder how we can explain those studies that claim real estate values reflect school quality. Funny how everyone agrees that EMH holds for both housing and schooling when they talk about those studies. Nobody says agents use school quality as sales pressure or that lenders target those neighborhoods. No. In this case, housing markets are so efficient that they even reflect the value of schools that families supposedly can't even understand.

2. It's a shame that desegregation looms so large as a response to Jim Crow. It wasn't segregation that harmed black children. White children were in segregated schools too. The black children were harmed because their schools were mismanaged and they had no choice or control.

The focus on desegregation leads to this notion that white kids or middle class kids have some sort of magical quality and it's doing other kids a favor to put them in a school with middle class kids. It's a sort of elitist notion that is presented as social justice. There really isn't a strong reason to believe that marginalized kids are served by going to a school run to meet the demands of a bunch of middle class families that have a much different set of aspirations and challenges. With choice, those sorts of conceits would be less relevant.

Alan Goldhammer writes:

the best data on vouchers comes from the Milwaukee experiment which has been going on since 1990. The main thing that it has accomplished is keeping the Catholic Church alive in the city as they rely on the vouchers to keep parishes viable.

Public schools work well where there are sufficient resources to have high quality teachers and a modest student teacher ration. They don't work well when those two factors are not met.

Yaakov Schatz writes:

The discussion above on whether competition improves schools seems to be ignoring the role of innovation. The school industry is a very conservative one with very entrenched beliefs about how things should be done. Even if we ignore government regulation that outright prevents innovation, the expectation that limited competition (very limited as far as I know) will achieve all possible gains within 20 years, is very unrealistic. This is particularly so given that in my opinion, a large portion of the gains can only be achieved by using less coercion. For parents to trust new schools with new methods using less coercion, the schools will need to have a long history of success, which can only be built up over many years.

Roger Sweeny writes:

Michael Byrnes hints at something every analysis of schooling needs to consider: the consumer is not the chooser. The consumer is a young person but where that young person goes to school is determined by adults, by parents (directly in a choice program, indirectly by deciding where to live) or by the school department.

Even more important, adults decide what constitutes "education" and what is required to get one. In Massachusetts, it's 990 hours of "instructional time" in 180 days, taking courses that cover various aspects of history, math, science, and English Language Arts.

For many students, many of those courses have little intrinsic interest--which is one reason it is so hard to close the various gaps between high-performing and low-performing students. But the whole idea of education is that the uneducated, aka the ignorant, don't know what's good for them.

BillD writes:

This is a topic that is at the top of my mind. We moved our 2 kids this year from one of Chicago's "best" neighborhood public elementary schools to a private school. Some points/thoughts:

1) Not every good school is good for every kid. 1 of our kids was fine in the neighborhood school, the other wasn't.

2) In Chicago the public schools spend about $13k per student. Our new school is only a few thousand more. But public school student:teacher ratios are 30:1 while the new school is 24:2.

3) There are no formal IEPs or 504s in the new school. Because they already have systems and processes to adapt to kids with additional needs. (But I doubt they have processes and systems for those kids with severe issues)

4) From a parent perspective, it's amazing to see how much differently we are treated at the private school. I really feel like they value me as a customer.

5) We are fortunate to be able to afford the choice. I feel sorry for those stuck in the truly bad schools.

6) I don't imagine there will be any impact in academic achievement. That wasn't even a factor in our change. But our lives will be less stressed and better for it.

BC writes:

One topic of recent concern is the growing "concentration" in many industries, usually portrayed as a bad thing. How much concentration is there in government monopoly schools in the K-12 education industry?

Nick Ronalds writes:

Scott Sumner and other commenters correctly note that cost is a key consideration in addition to outcomes. But my question for Megan McArdle is, in what sense are we "20 years on"? Voucher-supported schools have had to struggle everywhere for every inch, and the total number is surely trivial compared to the total school population. Given the institutional resistance to vouchers, what investors or foundations would devote major resources into developing private schools dependent on vouchers? In short, how meaningful are the 20 years of "evidence"? While my three kids were in public school, I never had the choice of sending them to a private school using vouchers, and I know no one who did. I do know that my wife and I were often frustrated by our inability to anything about bad teachers--of which there were are too many even in the schools in our Chicago suburb renowned for its top-notch public schools. Perhaps there's been enough evidence to justify Megan's doubts, but I'm not yet persuaded.

Alan Goldhammer writes:

@Nick Ronalds and others - as I noted in an earlier post, the Milwaukee Wisconsin school system has a long history with vouchers and a lot has been written about it (I'll not post lots of links but only note that you can Google 'Milwaukee School Vouchers' with or without 'fail' in the search term).

It was and is not a success on many levels (other than preserving the Catholic Church as I already noted). The rate of failure of the 'private' schools started to take advantage of the voucher system was surprisingly high. The vast majority of the 'private' schools did not address special needs children and those kids were left in the public school system where there still was a mandate.

Lost in the original post and presumably Ms. McArdle's writing (I do not read her stuff any longer as most of it isn't worth it to me) is that there has been a large change in a number of public school districts such that they are more responsive to the needs of parents and students. My oldest daughter is a special education teacher and has worked in both public and private schools. The private schools are horribly underfunded and much more regimented than the public schools. The rate of turnover of the senior staff at the private schools is much higher as well as the teachers do not get the resources.

Both my daughters went to public schools in an area that has a lot of private schools (suburban Washington DC). Our county has never even considered a voucher or charter school program as the public schools are exceptional. Of course every school district is different and presents unique challenges. My wife has worked at a major university in the education department and is intimately familiar with the pros and cons of 'privatizing education.' There is not an easy answer as she puts it.

LK Beland writes:

Dr. Sumner, do you have references to a older posts where you discuss ideas such as

having public schools makes no more sense than having a public church
vouchers can produce large cost savings, relative to public schools

These are fairly controversial statements. I would appreciate some context.

Thomas Sewell writes:

When we opened the first K-8 Charter school in a County, the local District schools for some reason suddenly changed a bunch of their polices. Parents could choose their child's teacher, they started having Art and Language available, etc...

So the competition argument has a lot of validity, as does the parental choice argument, as you may notice that what the District schools suddenly started needing to compete on was treating the parent's desires with respect and trying to make them happy, not necessarily test scores per se.

Joe Munson writes:

I think its amazing that older teens and parents are treated like one and the same.

They have different incentives, and parents don't make great choices for teens all the time, they prioritize themselves more than anyone will care to admit.

The extreme version of this is WWASP camps, and gay/straight conversion camps and such, in these cases school choice was terrible.

It happens to a lesser degree more often, but I think it is a pity that juveniles are denied some basic rights in the U.S.

(Goldhammer): "Public schools work well where there are sufficient resources to have high quality teachers and a modest student teacher ratio."

Newark, NJ, school district. % White = 8.2%. Student/FTE teacher ratio = 12.4:1. 2014 enrollment = 34,861. Total 2014 revenues = $1,111,829,000. $/per pupil = $31,893.

Washington, DC, school district. % White = 12.7%.
Student/FTE teacher ratio = 12.4:1. 2014 enrollment= 46,144. Total 2014 revenues = $1,342,220,000. $/per pupil = $29,087.

Detroit, Michigan, school district. % White = 2.3%. Student/FTE teacher ratio = 16.7:1. 2014 enrollment = 47,277. Total 2014 revenues = $835,911,000. $/per pupil = $17,681.

Kansas City, Mo. school district. % White = 8.8%. Student/FTE teacher ratio =14.0:1. 2014 enrollment = 15,386. Total 2014 revenues =$233,955,000. $/per pupil = $15,205.

Hawaii DOE. % White = 13.3%. Student/FTE teacher ratio = 15.6:1. 2014 enrollment = 182,384. Total 2014 revenues = $2,696,665,000. $/per pupil = $14,785.

Anoka-Hennepin, Mn. school district. % White = 74.8%. Student/FTE teacher ratio = 18.2:1. 2014 enrollment = 37, 951. Total 2014 revenues = $487,862,000. $/per pupil = $12,855.

Minneapolis, Mn. school district. % White = 33.2%. Student/FTE teacher ratio = 14.0:1. 2014 enrollment = 36,999. Total 2014 revenues = $655,668,000. $/per pupil = $17,721.

Lack of money is not the problem, so more money is not the solution. Teacher quality (NOT to be confused with Education credentials) makes a larger difference than class size.

(Beland): "These are fairly controversial statements."
1. Belgium*, Canada, Chile*, Denmark, England, Hong Kong**, Ireland**, the Republic of Korea, Macau**, the Netherlands*, Sweden, and Taiwan subsidize parents' choice of schools outside the government-operated school system. 
*Majority of enrollment in non-government schools. 
** Over 90% of enrollment in non-government schools.
2. NAEP test performance falls as school districts increase in size. Per pupil costs rise as districts increase in size. There are no economies of scale at the delivery end of the education business as it currently operates.
3. Education only marginally qualifies as a public good as economists use the term, and the "public goods" argument implies subsidy and regulation, at most, not State (government, generally) operation of an industry.
4. Corporate oversight is a public good and the State is a corporation. State assumption of responsibility for the production of a public good transforms the free rider problem at the root of public goods analysis but does not eliminate it.

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