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Why Federal Vouchers Are Still a Bad Idea
When president Bush threw the idea of a federal school voucher program into his budget earlier this year, few people noticed and those who did rarely took it seriously. Well, it’s now a bill, though only a bill, and it’s sittin’ there on Capitol Hill…
Many good people in the school choice movement think this is a wonderful thing. Reluctantly, I must disagree. As I wrote in response to the president’s original proposal: federal school vouchers are a bad idea.
The School Choice Movement’s Greatest Failure
Both the Wall Street Journal and the New York Times jumped on the release of a new study by the National Center for Education Statistics this weekend. The WSJ’s headline was particularly dramatic: “Long-Delayed Education Study Casts Doubt on Value of Vouchers.”
No, it doesn’t.
And it is a failure on my part, as well as a failure of the school choice movement as a whole, that the media don’t understand why.
Taking the study entirely at face value, what it says is this: private school students consistently score better in math and reading on the National Assessment of Educational Progress (NAEP) than public school students, but their advantage essentially goes away if you apply a particular set of controls for the differing student characteristics between the two sectors (things such as wealth, race, etc.)
Okay, you say, but if private schools don’t significantly outscore public schools, what’s the point of school voucher programs or other reforms that would give all parents access to the public or private school of their choice? Why, in other words, is the Journal’s headline wrong?
It’s wrong because the point of voucher programs is to create a competitive education industry, and the existing population of U.S. private schools does not constitute such an industry.
A vigorous free market in education requires that all families have easy access to the schools of their choice (whether public or private); that schools are not burdened with extensive regulations on what they can teach, whom they can hire, and what they can charge, etc.; that consumers directly pay at least some of the cost of the service; that private schools not be discriminated against financially by the state in the distribution of education funding, and that at least a substantial minority of private schools be operated for profit.
This set of conditions does not exist in any state in the nation. Instead, American education is dominated by a 90 percent government monopoly that is funded entirely through taxation. The private sector occupies the remaining 10 percent niche, is almost exclusively operated on a non-profit basis, and is forced to charge thousands of dollars in tuition in the face of the “free” monopoly schools that spend an average of $10,000 per pupil per year.
This is not a market.
No study was necessary to point this out.
Competitive markets are characterized by innovation, inexorable improvements in cost effectiveness and the quality of goods and services, and the rapid growth of the most successful providers. None of this has occurred in the U.S. private education sector, precisely because that sector does not constitute a competitive market.
The last great innovation to transform classroom instruction occurred during the presidency of Thomas Jefferson: the invention of the chalkboard, around 1801. Since that time, the pace of innovation has been so slow that a student from the mid-1800’s would immediately recognize a modern classroom setting. The most sought-after private schools enroll only about a thousand more students today than they did a century ago. This degree of stagnation is unheard of outside of the education sector, because it is only in the education sector (at least in liberal democracies) that market activity has been so thoroughly extinguished by government monopoly provision.
Hence, this study of our current small, non-market niche of private schools does not allow any generalization to the sort of outcomes to be expected from a true free market in education—and the creation of such a market is the primary justification for voucher and other school choice policies.
If I were better at my job, and if the school choice movement as a whole had a more effective media machine, this fact would be widely understood and we wouldn’t see fallacious headlines like the one cited above.
A closer look at the findings
That major point having been made, let’s take a look at the study’s findings on their own merits, as an examination of the current crop of public versus private schools.
The first problem with the study is that it collects no data on per-pupil spending in public versus private schools. Private school tuition, according to the NCES itself, is about half of the average public school expenditure per pupil. While private schools have some other sources of revenue, they still spend thousands of dollars less per pupil than public schools even after taking these other revenues into account, and so may be dramatically more efficient even if their absolute achievement levels are comparable to those in public schools. Hence it is possible that, if spending were equalized, private schools would raise student learning substantially compared to current levels (while it has been shown that spending and achievement are largely unrelated in the public sector, this has not been demonstrated in the private sector. In fact, evidence from developing countries suggests that higher spending in private schools DOES increase student achievement).
Next, it is worth observing the specifics of the study’s findings. It reports that there is a small advantage to public schools in 4th grade math, but that this advantage is not present at the 8th grade. It further says that, at the 8th grade, private school students have a small advantage over public school students in reading. One possible interpretation of these findings is that public school students fall behind their peers in private schools the longer they spend in the classroom.
That, of course, is only one possibility. At any rate, it is clear that parents are most concerned with what their children know and are able to do at the end of their k-12 education, so if, by the later grades, private schools confer a significant advantage, this would definitely seem to favor them.
Methodological and Data Problems
All of the above discussion takes the study’s findings at face value. This may be ill-advised, since a preliminary review suggests that there may be real methodological problems and potentially serious data problems. Several of the control variables used in the model seem problematic, including the following.
The rate of student absenteeism
It is entirely possible that sectoral differences in the feeling of community or level of personal attention, ability of school staff to motivate students, etc., could affect student absenteeism. So it is erroneous to treat this as exogenous (i.e., as independent of school sector) and to control for it.
School size
This variable is clearly endogenous (i.e., affected by school sector). Parents tend to prefer schools in which teachers know all the students by name and which create a friendly, community atmosphere. This is much easier in smaller schools, and hence there is a competitive pressure not to get too large in the private education sector. No such pressure exists in the public sector, where contrary bureaucratic incentives encourage large school size. As a result, the average public school is roughly three times the size of the average private school: 521 students versus 182. It is thus unjustifiable to pretend that school size is independent of school sector.
The percentage of students in the Title I program
A report by the Congressional Budget Office notes that “About 97 percent of public schools and 45 percent of private schools participate in the school lunch program.” This vast difference in level of participation by schools may have a significant effect on the share of eligible students who are in fact being served by the program.
Sample specification problems
Between a fifth and a quarter of the private schools selected for the study did not participate. The authors make no serious attempt to analyze non-participants to determine how and to what extent they might differ from participating schools in ways related to student performance. This could bias their results in unknown ways.
It seems likely that public and private sector schools apply the federal Specific Learning Disability label differentially. This label states that children are disabled if they perform at a level below what would be expected for students of their age and intelligence. It does not account for the possibility that poor performance may be the result of poor instruction. Roughly six percent of all public school students are placed in this category, making up nearly half (43%) of all students classified as disabled in the public sector. Among private schools participating in this study, a total of 3 to 4 percent of students are classified as suffering from ANY disability, mental or physical. Because students classified as SLD can be excluded from the test taking pool or given extra time or other accommodations, differential SLD classification rates between the sectors may affect sectoral mean scores (because these students, by definition, perform below the average of their peers).
Instrument selection
Tom Loveless has pointed out in a paper for the Brookings Institution that the NAEP mathematics test does a poor job of measuring the skills that it is purported to measure. Calculator use is allowed throughout, so it does not measure basic arithmetic ability. More advanced topics such as algebra with fractions, are also all but absent, making it a poor test of these more advanced skills. If there are differences in either of these important areas between the sectors, the NAEP will not pick it up. It is natural for scholars to want to analyze the data they have, but readers should be aware of the shortcomings of those data as a measure of both basic and advanced mathematical ability.
Conclusion
Taking all of the above analysis together, this study’s findings would have little bearing on market-based reforms such as vouchers and tax credits even if it were methodologically flawless. Even as a comparison of public schools and the existing (non-market) crop of private schools, it leaves much to be desired because it neglects to consider the substantially higher per-pupil spending of public schools.
But the study, as noted above, is not methodologically flawless. Several of its control variables appear to be misspecified, and so its adjusted test score averages may be significantly biased. It makes no attempt to assess the impact of the non-participation by between a fifth and a quarter of all the private schools selected for participation in the study – another probable source of bias. And it uses a mathematics test (the NAEP) that has been shown to do a poor job of assessing both basic arithmetic and more advanced mathematical skills, thus obfuscating possible differences in performance in these (rather important) areas among the students tested.
In a nutshell: this study does not say what some reporters think it says, and it may not even say what its own authors think it says.
Why Tax Credits Are Better than Vouchers
A recent post at the popular conservative blog RedState argues that government-funded school vouchers are a bad idea. It points out the merits of having people pay for their own children’s education and the problems that government funding introduces. Fair enough.
But what to do for the millions of families who cannot afford a good independent education for their kids?
The answer is a nonrefundable education tax credit system applied to state and local taxes. A complete education tax credit program has two parts: a credit for parents to use against their own expenses, and a credit for individuals and businesses that donate to private scholarship-granting organizations (SGOs). The first part helps middle-income families pay for their own children’s schooling, and the second part ensures that low-income families also have the resources they need to participate in the education marketplace.
Under this system, no one is compelled to fund anything to which they might object, and the direct financial responsibility of parents is maximized. The personal credits involve people spending their own money on themselves, and the donation credits allow taxpayers to choose the SGO that receives their donations. No government money is used, but universal access is assured.
I give an exhaustive treatment of the differences between tax credits and vouchers in a paper titled “Forging Consensus.” Two critiques of that paper, along with my responses, appear here.
It is possible to ensure universal access to the education marketplace without sacrificing the freedom that makes markets work.
Have We Learned Nothing from “SchoolHouse Rock”?
“I’m just a bill, yes I’m only a bill, and I’m sittin’ here on Capitol Hill…”
Back when dinosaurs roamed the earth and cartoons were confined to Saturday morning broadcast programming, kids learned about the separation of powers (among other things) from the ”SchoolHouse Rock” toons.
Apparently some future New Jersey lawyers weren’t tuned in.
The recent lawsuit about which Cato’s Neal McCluskey has been writing asks the court to create a school voucher program in New Jersey as a remedy to the state’s deficient public school system. Right ends, wrong means. Courts are for legal interpretation; legislation is for legislatures.
There’s little doubt that New Jersey is failing to live up to its constitutional promise to provide a “thorough and efficient” education. Should the court so rule, it will be up to the legislature to fix the problem, and introducing a universally accessible free education marketplace is certainly the best solution they could implement.
But it’s their job to implement it, not the court’s.
Pulp Non-Fiction: The Seedy Side of Monopoly Schooling
The Detroit Free Press reported recently that the city’s schools have been ordered to repay nearly a million dollars in federal Title I funding because “there are no assurances that these [funds] did not benefit an employee personally.” The money went to flat screen TVs that are nowhere to be found, anger management classes that never occurred, and half a million dollars to, uh, pass out flyers. Did I mention that the $500,000 paper route went to an ex-con in a no-bid contract?
Critics of market-based education reform claim that it would open the door to corruption. As it happens, corruption has been living happily within the public schools for some time now, raiding the icebox and stealing kids’ lunch money — not to mention the money that is supposed to go toward their education. Cato’s Neal McCluskey published a run-down of this broken-down system last year.
Hat tip: Mackinac Center for Public Policy
Challenging the NEA: Priceless
To quote the old Mercedes Benz airbag commercial: “Some things in life are too important not to share.”
The National Education Association’s national convention begins today at the Orange County Convention Center in Orlando, FL. Outside, the Evergreen Freedom Foundation (a Washington State think tank) is parking a truck with a billboard highlighting some of the expenditures the NEA listed on its 2004 federal financial disclosure forms.
The billboard is too important (and good) not to share:
When a Billion Here and a Billion There DON’T Add up to Real Money
Warren Buffett is giving away $44 billion of his fortune, $30 billion of it to the Gates Foundation. Much of that money will go toward education. If it is used for more fiddling about with our existing school monopoly, it will have a negligible long term impact on American education. If it is used to help empower parents with an unfettered choice of public and independent schools, it will transform the lives of millions of children.
Soon we’ll find out how well Mr. Buffett’s investing acumen translates to the education philanthropy business.
Reduce Taxes, Increase Choice
Interesting column in the Pittsburgh Tribune Review today, advocating school vouchers as a way of reducing taxes while improving families’ educational options. Not a bad idea. Of course, education tax credits would be an even more direct solution to the problem. But this guy is definitely on the right track.
Rube Goldberg, Call Your Office
In a recent blog post, I mentioned L.A. Mayor Antonio Villaraigosa’s quest for control over his city’s public schools.
Well, he got it. Sort of.
After concessions to appease both the teachers’ unions and the school board, the L.A. school district chain of command will soon look like it was designed by Rube Goldberg. On acid.
The Mayor will have more or less complete control over a dozen or so especially troubled schools, and veto power over the Superintendency. The superintendent will gain budgeting powers, except over the union employee contract (which is, of course, the biggest budget item). Teachers and principals will be made no more accountable to parents, but they will gain the power to set their schools’ curricula. The board will negotiate the union contract — except of course that they will lose control over what teachers actually teach. Oy vey.
Had Villaraigosa won the supreme authortity he was seeking, it would have meant a transfer of monopoly power from the board to the mayor, and would have done nothing for the city’s kids. The deal that has been cobbled together amounts to a monopolist with multiple personality disorder. Its prospects are, if anything, even bleaker.
What L.A. needs is for power to be returned to parents. The educational chain of command should involve two parties: the school and the family. If the school fails to measure up, the family should be able to easily move its children elsewhere.
Any other “accountability reform” is self-serving political quackery.
School Choice Programs Proliferate in Arizona
The AZ legislature has been busy. Back in the spring, it decided to allow businesses to take a tax credit for donations to tuition scholarship organizations. These organizations help low-income families pay for tuition at independent schools. The bad news is that the legislature originally capped the total value of such creditable donations at a mere $5 million annually. The good news is that they just doubled the cap to $10 million, and put it on a track for reaching $21 million within four years.
Lawmakers also created two new voucher programs: one for disabled students and another for children in foster care.
Not everybody is happy about it, but the families who will benefit from these programs are lucky indeed. And with the passage of these bills, Arizona inches closer to the time when every family in the state will be able to easily choose the public or independent school best suited to their kids.
One thing to watch out for: while education tax credits have already survived constitutional challenge in Arizona, vouchers have not. The two new voucher programs may well be challenged by the public school employee unions and their fellow travelers on state constitutional grounds, and if so the outcome is not at all clear.
Even if the voucher programs are challenged and struck down by the courts, however, a combination of donation and personal use tax credits can provide universal access to the education marketplace.
The future is freedom. The monopolists just haven’t realized it yet.
Chamber Shows Villalobos the Door
For the first time in its 90 year history, the Florida Chamber of Commerce has pulled the plug on its backing for a political candidate. State Sen. Alex Villalobos, who received the Chamber’s endorsement in 2005, was dropped today because of his votes on several key issues. Paramount among them: his opposition to school choice.
The only surprise is that it took so long. Business leaders are beginning to understand that our state-run education monopolies are just as harmful—if not more so—than monpolies in any other field.
Let’s hope other chambers of commerce follow Florida’s lead.
Just a Bit of Harmless Schadenfreude?
In today’s “L.A. Story” editorial (subscription barrier), the Wall Street Journal criticizes Democratic legislators and teachers’ union officials for blocking an educational power grab by Democratic L.A. Mayor Antonio Villaraigosa.
Just a bit of harmless schadenfreude over Democratic infighting? Not really. In the process of painting Villaraigosa as victim and protagonist, the article perpetuates a dangerous myth: that mayoral or state takeovers of failing school districts are a worthwhile education reform.
The editorial points to districts like Boston and Chicago — widely regarded as successful takeovers — but ignores cases like Detroit and Paterson that were clear failures.
And how successful is Chicago, anyway? The “poster district” for takeovers, Chicago has not exactly become an educational Mecca over the past 11 years. A study of teacher quality released just last week found that “Chicago Public Schools fared particularly poorly…, with three-quarters of the campuses landing on the bottom of the pile.”
And how about the ultimate test? What share of entering Chicago high-school students are likely to go on to graduate from college by the time they’re 25? An April 2006 University of Chicago paper provides the answer: 6.5 percent. For African American boys, the figure is 2.5 percent.
What the children of Chicago, L.A., and every other American city and town need is not more central planning from the mayor’s office or the statehouse. What they need is the ability to easily kiss bad schools goodbye and transfer to better ones.
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