School Choice vs. School Choice

"America already has an extensive system of school choice. Yet it is both inefficient and unfair."

Contrary to a widespread impression, America already has an extensive system of school choice. Yet the system is both inefficient and unfair. It discriminates against low-income families and racial minorities.

This paper makes the case for replacing our existing school choice system with one that is better, one that creates a level playing field on which schools compete for students, and students and their parents exercise their own choices.

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The vast majority of parents are already participating in a system of school choice. For example, there are 79 school districts within a 50-mile radius of downtown Dallas. Assuming each district has at least two campuses at each grade level, a typical family has a choice of about 158 public schools – provided the parents can afford to buy a house in any neighborhood and are willing to drive a considerable distance to work.

"Dallasites can choose from 158 schools — provided they can afford a house in any neighborhood."

How well does this system work? Better than you might think. A study by researchers at Southern Methodist University and the Dallas Federal Reserve Bank found that North Dallas houses near higher-ranking elementary schools sold for about 20 percent more than houses near lower-ranking schools.¹ The authors conclude that the market for education works surprisingly well. Parents can discern quality and the market charges a premium for it.

This conclusion is supported by an informal survey conducted by Dallas attorney H. Martin Gibson of housing prices in Highland Park – a wealthy Dallas suburb. Although most Highland Park homes are inside the Highland Park Independent School District (HPISD), a few are in the Dallas Independent School District (DISD). Gibson found that, all else equal, homes on the HPISD side of the street sell for 24 percent more than those on the DISD side. This implies that many Highland Park homeowners are paying about $72,000 just for the right to send their children to Highland Park schools.²

If the system works well for those who have money, how does it work for those who don't? What happens to families who cannot afford to buy a house or don't even own a car? Unfortunately, they're out of luck. Since the current choice system in Dallas and across the country rations educational opportunity through the housing market, it's almost inevitable that the children of low-income families will end up in schools no one else wants to attend. These are the schools with the worst teachers, the worst principals and the lowest test scores.

A compounding factor is that parents who can afford more expensive homes are much more adept at dealing with public sector bureaucracies. If a bad teacher or principal is identified at a school in a wealthy neighborhood, parents typically will complain until that person is transferred to another school. Then the parents at the next school will likely complain. This transfer process will continue until the worst teachers and worst principals wind up at schools where either the parents don't complain or nothing happens if they do. These invariably are schools in low-income neighborhoods.

"When educational oppourtunity is rationed through the housing market, low-income children will end up in schools no one else wants to attend."

Of course, it is possible to turn a truly bad school into a good one through some Herculean effort.³ But if the effort was successful and perceived to be permanent, "gentrification" would occur. Middle-income families would move into the neighborhood and bid up housing prices. Low-income residents would be priced out of the market and would have to move somewhere else. It is no accident that the worst schools are consistently found in low-income neighborhoods which lie predominantly in urban areas.⁴ Indeed, it could not be otherwise.

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Our current system of school choice should be replaced by a new choice system – one that is more efficient and more fair. But before considering the alternatives, we must consider two objections to the above analysis frequently raised by teachers unions and their representatives.

Does the Fault Lie with the Children? How do we know that the poor performance by children in low-performing schools is due to the fact that they are attending bad schools? How do we know that the fault doesn't lie with the children themselves? When they are in a defensive mode (i.e., when they are not asking for more money) the teachers unions throw up the image of the school as a warehouse, in which the degree of learning that takes place is due to such outside factors as the student's background, home life, genes, etc. How do we know that the teachers unions aren't right?

One piece of evidence is student performance on standardized tests over time. For instance, a National Center for Policy Analysis study of student achievement in Texas found more than 70 percent of African-American and Hispanic first graders passed a state-sponsored test to establish minimum basic skills.⁵ At that point, children had spent six years with parents and only a few months with their teachers. But by the time they reached the ninth grade, more than half of the minority students in Texas were failing.⁶ The longer these children spent with teachers, the worse they did – relative to society's expectations and relative to their non-Hispanic white cohorts. If home life and parents were the problem, the pattern of these test score results should have been reversed.

"Test scores of low-income children improve if they are places in schools with middle-income children."

Another piece of evidence is that test scores of low-income children consistently improve if they are placed in schools with middle-income children. For example, a congressionally mandated four-year study of about 27,000 Title I students found that poor students who attended middle-class schools performed significantly better than those who attended schools where at least half the students were eligible for subsidized lunch.⁷ The contrast was even greater with schools in which more than 75 percent of students lived in low-income households.⁸ A report by Education Week magazine echoed this finding, concluding that poor students who had the opportunity to attend middle-class schools performed significantly better than their peers who remained trapped in high-poverty schools.⁹

Are the Worst Schools Starved for Resources? Another argument used by the teachers unions is that underperforming schools underperform because they are starved for resources – this despite academic research showing there is no relationship between student achievement and money spent, or any other input.¹⁰

The latest iteration of the National Assessment of Educational Progress (NAEP) test found that from 1992 to 2000 the average reading scores for fourth graders remained flat.¹¹ In fact, two-thirds of students fell below what the federal government deems proficient, and 37 percent fell below basic knowledge in reading, which means essentially that they cannot read.¹² Although the U.S. has spent nearly $125 billion over the last 25 years, "we have virtually nothing to show for it," said Education Secretary Rod Paige.¹³

Consider the case of the District of Columbia Public School System (DCPS). DCPS is spending more than $8,000 per student on the average, enough to pay the tuition at some of our best private schools. Yet it is one of the most dysfunctional school systems in the country and consistently scores at the bottom on student achievement exams. For example, the average math score for D.C. fourth graders is 37 points below the national average and even 21 points below the lowest scoring state.¹⁴ Indeed, in a 1996 report, the District of Columbia Financial Responsibility and Management Assistance Authority warned that the "longer students stay in the District's public school system, the less likely they are to succeed."¹⁵

"After Kansas City spent $2 billion, students registered no improvement in test scores."

The typical teachers union response is: whatever the amount spent, the results would be better if we spent even more. But what would happen if an unlimited amount of money were made available to bad schools? A federal judge in Kansas City, Mo., decided to find out. Under his orders, Kansas City's school system spent $2 billion of taxpayers' money. The student-teacher ratio was reduced to 12 or 13 to one, teacher pay was increased and workloads were reduced. Television and animation studios were added, as well as a robotics lab and field trips to Mexico and Senegal. The result? Black student achievement scores did not improve at all, and the black-white achievement gap remained the same.¹⁶

This is an amazing outcome. If you believe the academic studies, you could improve Kansas City student achievement by just giving the kids bus fare and sending them to a school in the suburbs. Instead, this judge spent $2 billion and achieved absolutely nothing.

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As an alternative to rationing educational opportunity through the housing market, parents, school boards and public officials around the country are seeking other ways of exercising choice. The following is a brief description of the models in use.

Public School Choice. Under public school choice, parents have options that are restricted to public schools. For example, 33 states have open-enrollment laws of varying degrees that allow students to attend public schools outside their home district, and 18 states make open enrollment mandatory.¹⁷ [See Figure I.] Charter schools are another popular type of public school choice, but most of the charter school activity is concentrated in a handful of states. For example, five states accounted for 57 percent of the 2,069 charter schools operating in the U. S. last fall: Arizona (408), California (261), Michigan (181), Texas (178) and Florida (151).¹⁸ Charters "blur the boundaries between public and private schools."¹⁹ They are public in that they take public money, use public buildings and cannot select their students, but they are free to innovate in the classroom.

"Private voucher programs offer privately funded scholarships for students to enroll in private schools."

The third type of public school choice is the option to attend magnet schools. Many of these schools were designed by federal judges for the express purpose of drawing white children from the suburbs back into inner-city school districts. Magnet schools are almost universally thought to work well, and in many districts are the only public schools that are competing with other schools. Currently, about 4,000 magnet schools are in operation across the country.²⁰ In a recent survey by the National Center for Education Statistics, 16 states reported having magnet schools – although not all states responded.²¹ Those with the most magnet schools were California (472 schools with 9.3 percent of the state's student body), Illinois (315 schools and 11.6 percent of the student body) and North Carolina (119 schools and 6.1 percent of the student body).²²

Privately Funded Vouchers. Privately funded voucher programs are becoming increasingly prolific. For example, Children First America is a nonprofit organization that represents 79 private voucher programs in cities and states across the country.²³ The programs offer privately funded scholarships for students to enroll in private schools. In most cases the students must come from poor families (qualify for subsidized lunches). The families often are required to pay part of the tuition, say, $500 a year. Among the most notable privately funded programs are San Antonio's HORIZON program, the School Choice Scholarship Foundation in New York City, Parents Advancing Choice in Education (PACE) in Dayton, Ohio, the Washington Scholarship Fund in Washington, D.C., and the Children's Scholarship Fund in Charlotte, N.C. [See the sidebar: Privately Funded Voucher Programs.]

Publicly Funded Vouchers. Unlike privately funded programs, publicly funded vouchers are paid for with taxpayer dollars and can be used at participating public and private schools. These programs may or may not include religious schools. Publicly funded voucher programs include Milwaukee's Parental Choice Program, Cleveland's Scholarship Program, Florida's statewide A+ program and longstanding programs in Maine and Vermont. [See sidebar: Taxpayer-Funded Voucher Programs.]

"At least four states allow tax deductions or tax credits for educations."

Tax Credits and Tax Deductions for School Choice. At least four states – Arizona, Illinois, Iowa, and Minnesota – allow taxpayers a tax deduction or tax credit for donations to organizations that provide scholarships to students or for parents who spend personal funds on private school expenses. For example, in its second year of operation Arizona's tax credit program offered scholarships totaling more than $2 million to 3,700 students.²⁴ Under Illinois' plan, parents can receive a state income tax credit for 25 percent of tuition and books or lab fees at K-12 private or public schools up to $500 per family.²⁵

"During the 1999-2000 school year, 12,000 students used taxpayer-funded vouchers."

Voucher programs can be targeted to specific populations, such as low-income families or students in schools that consistently fail. For instance, vouchers in Milaukee and Cleveland are limited to families with low incomes, while vouchers in San Antonio's HORIZON program are solely for students in a particular school district. Florida's A+ Accountability Act aims at students in failing schools.

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Evidence from around the country supports the contention that allowing parents to choose a child's school improves the child's test scores. This appears especially true for African-American children.

"Allowing parents to choose a child's school improves the child's test scores."

One difficulty in evaluating student achievement in school choice programs has been deciding how best to measure the results. Researchers have long recognized that comparing choice students with students who remain in public schools imposes "selection bias." Parents who enroll their children in private schools are not a random sample of public school parents, and their children are unlikely to be a random sample of all students. For example, choice parents may be more motivated and more involved with their children's education. They may choose an alternative school because they perceive that their children's talents are not being exploited. Or they may be concerned that their children are falling behind in a traditional public school.

A research design that solves the selection bias problem is a lottery.²⁶ Among the students who apply and who qualify for a choice program, actual acceptance is determined by chance. Researchers can then compare the future progress of the acceptees (who enroll in choice schools) with the rejectees (who remain in public schools), assuming other factors are the same.

The Parental Choice Program in Milwaukee, for example, distributes school vouchers to qualifying students by lottery. A study conducted by Harvard University's Program on Education Policy and Governance found that students who stayed in the program for three or four years registered reading scores 3 to 5 percentile points higher than the public school control group, and math scores 5 to 11 percentile points higher.²⁷ [See Table I.] According to professor Paul E. Peterson of Harvard University, if this trend continued over 12 years of schooling, it would eliminate a large part of the gap in reading performance and the entire gap in math performance between white and minority students.²⁸

Cecilia Rouse, Princeton economist and member of the Council of Economic Advisors during the Clinton administration, also studied the Milwaukee Choice program. She found that scholarship recipients experienced a 1.5 to 2.3 percentile point gain over their peers in math for each year spent in a private school, but she found no substantive increase in reading scores.²⁹ Although Rouse's study found smaller benefits than those found by the Harvard group, she concluded that the program has a generally positive effect on student achievement.

"If student test scores in Milwaukee improve at the same rate over 12 years of schooling, it would eliminate a large part of the gap between white and minority student performance in reading and the entire gap in math."

The most critical study of the Milwaukee experiment was conducted by John Witte, a professor at the University of Wisconsin-Madison. Witte compared the academic performance of choice students to a sample of Milwaukee public school students and concluded that there was no substantial difference between the two groups, especially those from low-income families. Other researchers have criticized Witte's approach because he did not take advantage of the random assignment created by Milwaukee's lottery. However, even Witte is mildly favorable toward school vouchers. He says, "Choice can be a useful tool to aid families and educators in inner-city and poor communities where education has been a struggle for several generations."³⁰

The privately funded voucher programs in New York City; Washington, D.C.; Dayton, Ohio; Charlotte, N.C.; and San Antonio, Texas, allow a closer examination of the effects of school choice programs on test scores. Vouchers are distributed in these programs by lottery also, but the privately funded programs also have collected demographics for all the applicants, allowing for a more complete analysis.

"Research by Paul Peterson shows that choice improves student performance, especially for African-America children."

Harvard's Paul Peterson examined the choice programs in New York, Washington and Dayton. In the first year, African-Americans who switched from a public to a private school experienced an overall test score gain of 3.3 percentile points and at the end of two years had gained 6.3 percentile points over the control group.³¹ However, after two years, students from other ethnic backgrounds seem to learn as much but no more in private schools than the control group.³² [See Figure II.]

A study of New York's program by Jay Greene found that choice students in the second grade through the fifth grade excelled over their public school peers by 2 percentile points in both math and reading.³³ In addition, students in fourth grade through fifth grade gained 4 points in reading and 6 points in math in just one year in the program.³⁴

In another Harvard study, Patrick Wolf, William Howell and Paul Peterson compared scholarship winners and losers. Under the Washington Scholarship Fund in Washington, D.C., they found African-Americans who received scholarships in the second to fifth grades outperformed the control group by 3 percentile points in reading and 7 percentile points in math. Those who attended private schools in grades 6 through 8, however, outscored their peers by only 2 percentile points in math and actually trailed by 8 points in reading.³⁵ No significant differences were observed for other racial groups.

A second study of the Washington Scholarship Fund was conducted by Jay Greene. He found that African-American students in grades 2 through 5 gained 6.8 percentile points in reading; however, students in grades 6 through 8 lost 8.2 points in math.³⁶ In Dayton, Greene found that African-American students gained 6.8 percentile points in math, but their gain in reading fell short of statistical significance, probably because of the modest sample size.³⁷

Evidence from Greene's examination of the Children's Scholarship Fund Program, a privately funded scholarship program targeted toward low-income families in Charlotte, N.C., also showed that providing families with scholarships has significant benefits. Scholarship recipients' scores on standardized math tests improved by 5.9 to 6.2 percentile points, depending on the type of analysis performed.³⁸ Scholarship recipients' improvement on standardized reading tests was 5.4 to 7.7 points.³⁹

Cleveland's publicly funded school choice program – which started as a lottery but expanded in an effort to offer all low-income families a scholarship – has also been studied in depth. Jay Greene, William Howell and Paul Peterson found that after two years in a private school, students registered an 8 percentage point gain in reading and a 16 percentile point benefit in math.⁴⁰

In another study of the Cleveland program, Dr. Kim Metcalf of Indiana University's Indiana Center for Evaluation found that after one year, student test scores showed no difference. After two years, choice students' test scores increased 6 percentile points in language and 4 percentile points in science over their public school counterparts, although there was no change in math, English or social studies.⁴¹

International Evidence. Additional evidence of the success of school choice programs is provided in a study conducted by Joshua Angrist et al. of the Plan de Ampliación de Cobertura de la Educación Secundária (PACES), a Colombian school choice program that ran from 1992 to 1997. Scholarships were awarded by lottery, and by 1997 more than 125,000 vouchers had been awarded.

"A study in Colombia found that school choice there had much the same favorable effects."

The length of the study enabled researchers to examine the longitudinal effects of school choice on participants. The authors found that scholarship winners experienced "higher educational attainment, lower grade repetition, a higher probability of taking college entrance exams, higher test scores and a lower probability of teen marriage or employment" than applicants who were turned away.⁴² In addition, college matriculation exam and achievement test results suggest that PACES vouchers had long-term benefits for recipients.

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Public schools enroll 89 percent of the nation's primary and secondary children and consume 92 percent of the country's education spending.⁴³ Even if we wanted to, we could not move all these children into private or charter schools in a short time. So one of the most important questions to ask about new systems of school choice is: what is the impact on public schools and the children who remain in them?

Do School Choice Programs Cream the Best Students? Critics of school choice fear that vouchers will draw the best students from public schools. The most involved parents and the most motivated students will be most likely to choose an alternative school, they argue, leaving the public schools to educate an increasingly difficult population without the support of informed, engaged parents. This will cause bad schools to become even worse.

"More than 100,000 students currently attend private schools with public money."

A problem with this argument is that it ignores one of the most important reasons why parents enroll their children in private schools: private schools are a refuge for students who fail in the public schools. Not only do parents seek alternatives for those children, but public school systems themselves frequently turn to the private sector for help with the most difficult students. According to the U.S. Department of Education, more than 100,000 students currently attend private schools with public money. Students with serious emotional disturbances account for 40 percent of these students.⁴⁴

"The population of Texas charter schools shows no evidence of creaming. In fact, more than two-thirds of their enrollment are at-risk children."

The population of charter schools shows no evidence of cream skimming. In Texas, 68 percent of the students attending open-enrollment charter schools are classified as at-risk (because of limited English proficiency, poverty, race, or geographic location), compared to 39 percent in Texas' traditional public schools.⁴⁵ [See Figure III.] In addition, seven of the 19 state charter schools now in operation are specifically for students who have dropped out of other schools.⁴⁶

Voucher programs do not skim cream either. In a 1999 evaluation of the Cleveland program, Paul Peterson discovered that "[Cleveland] Choice students, on average, have significantly lower family incomes than do Cleveland City public school students ($15,769 vs. $19,948), are significantly more likely to be raised by only their mother (68.2 percent vs. 40 percent) and are significantly more likely to be African-American (68.7 percent vs. 45.9 percent)."⁴⁷ Further, evaluations of the Milwaukee program and others demonstrate that they are not only enrolling students from low-income families, they are also enrolling students with below-average scores on achievement exams.

San Antonio's HORIZON program offers a scholarship to every student in the entire Edgewood School District. The 545 families in the HORIZON program have a slightly lower average family income than the Edgewood public school families.

What Happens to the Test Scores of Students Who Remain in the Public Schools? Schools that serve low-income communities typically operate as virtual monopolies. Their "customers" are held captive, unable to choose a rival institution. Like monopolies in business, they have little incentive to improve the quality of their product. However, when a school choice program emerges, the incentives quickly change.

Research conducted by Harvard economist Caroline Hoxby shows pronounced academic improvement in areas where public and private schools compete for the same students. Among students transferring from public to private schools, Hoxby found a 12 percent increase in future wage gains and a 12 percent increase in the probability of college graduation. But interestingly, Hoxby also found an 8 percentage point increase in the test scores of the students who remained in public schools.⁴⁸ This suggests that by forcing public schools to compete in areas where they previously had a monopoly, school choice programs improved the educational outcomes of all students.

"Every student in Giffen Elementary School, a failing school in ALbany, N.Y., was offered a voucher; the public schools responded by making radical changes."

Considerable anecdotal evidence supports Hoxby's conclusion. Giffen was perhaps the worst public elementary school in Albany, N.Y., when philanthropist Virginia Gilder offered private school scholarships to all of its students. Within months of the offer, the public school establishment responded by making radical changes. The school board installed a new principal, hired two new assistant principals, moved 10 teachers to other schools, and set aside $125,000 for books, equipment and teacher training.⁴⁹

After Milwaukee's choice program was expanded to allow participation of up to 15 percent of public school enrollment, about 15,000 students, the public school system closed its six worst schools and responded in other ways:⁵⁰

• More childhood education programs were developed, kindergarten programs for the 5-year-olds developed into all-day schedules and the number of kindergarten programs for 3-year-olds tripled.
• Before- and after-school programs expanded. In 1995 the public school system had one school with before- and after-school child care and tutoring programs for low-income families. Today, there are 82 programs.
• Charter schools grew. In 1995, only one charter school was authorized. By the 2000-2001 school year, six additional charter schools were in operation.
• Access to health care improved. Two public schools had health clinics in 1995. Today there are 47.

Florida's A+ program provides additional evidence.⁵¹ Florida's program ranks schools by grades of A through F. Students in schools that receive an F for any two years in a four-year period receive vouchers to attend another public or private school of their choice. Meanwhile, the state takes over and reorganizes the school.

"Florida's F and D schools took aggressive steps to improve performance."

Because Florida's efforts are targeted at failing schools, we would expect F schools to make more serious reform efforts than passing schools. After all, if F schools fail to improve, they are "voucherized," whereas if A through D schools do not improve they are slapped on the wrist. A detailed analysis of Florida's program by Jay Greene shows that student scores did indeed improve more quickly for students in schools that faced vouchers (F schools). According to Greene, the year-to-year change in test results does not differ among schools that received A, B or C grades. However, schools that received D grades improved a bit more than their superior counterparts. The F schools – those that faced "voucherization" if their poor performance was repeated – registered the greatest gains of all. [See Table II.]

"Florida schools that faced 'voucherization' if they failed registered the greatest student performance gains of all."

Is it possible that F schools just had more room for improvement? Would that account for the greater pace of change? Anticipating these questions, Greene compared higher-scoring F schools to lower-scoring D schools, which ensured that the improvements realized by failing schools were indeed due to the threat of vouchers. Both F and D schools had a history of low performance and faced pressures to avoid repeating low performance. While both "types" of schools were alike in many respects and perhaps were distinguished only by chance, F schools faced a much harsher future if they failed to improve. Green found that the improvement achieved by higher-scoring F schools was greater than the gains realized by lower-scoring D schools.

Another study of Florida's A+ program by Carol Innerst for the Center for Education Reform reveals the steps Florida's F and D schools took to improve performance, including longer school days, additional teacher in-service days for professional development and special programs to improve math and reading skills for at-risk students.⁵² For example, in Escambia County, location of a number of the schools deemed as failing in 1999, public school officials provided Saturday tutoring, hired new teachers and required parent-teacher conferences each grading period.⁵³

Other examples include Gadsden County School District's development of direct instruction programs, Palm Beach County School District's establishment of classroom libraries and closer observation of teachers in failing schools, Polk County School District's new language arts program and Volusia County School District's reduced class sizes and reading specialists.⁵⁴

What Are the Effects on Public School Finances? Critics often claim that choice programs will drain resources from the public schools. In an ideal choice system, the critics would be right. Indeed, the loss of funds that follows a loss of students is the primary motivator for improvement among schools that compete with each other. This, after all, is the way competition works in other markets.

However, most public school systems have not lost money as a result of an exodus of students. Rather, the public schools have gained. For example, the Milwaukee Public School system makes a profit on students who participate in the voucher program. In 1996-97, the district sent about $4,400 per student to the private schools the students enrolled in, but collected from the state $7,500 – earning a $3,100 "profit" for each student it no longer educated.⁵⁵

The Cleveland choice program also benefits the public schools financially. Public schools receive full per pupil funds for each student enrolled in the voucher program and, as in Milwaukee, are subsidized for students they no longer teach. In 1996-97, Cleveland public schools received a net surplus of more than $118,000 because of the voucher program.⁵⁶

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Over the past four decades, many – perhaps most – large city school systems have operated under court order. In these systems, federal judges must approve all important decisions to achieve one overriding goal: racial integration. The efforts all have failed. For example, the Dallas School District – which is 54.6 percent Hispanic, 35.8 percent African-American, 7.8 percent white, 1.4 percent Asian, and 0.4 percent American Indian – is the only Texas school district still under the jurisdiction of a federal court.⁵⁷ In response to the court, and sometimes to head off legal action, Dallas has established an array of disparate programs. Yet Dallas has 28 of the state's lowest-performing schools and is the worst of Texas' eight largest school districts.⁵⁸

"Overall, private school students are more likely than public school students to form racially heterogeneous groups."

More generally, half of all public school 12th graders are in classes that have more than 90 percent or fewer than 10 percent minority students. The situation has been very different in the private sector. Just 41 percent of private school students are in similarly segregated classrooms.⁵⁹ More than 37 percent of private school students are in classes whose racial composition is within 10 percent of the national average, while only 17.8 percent of public school students are in classes that are similarly mixed.⁶⁰

Overall, private school students are more likely than public school students to form racially heterogeneous groups. According to Jay Greene, 63.5 percent of students observed in private school lunchrooms sat in groups in which one in five students was of a different race. In public schools 49.7 percent of students were in a similarly integrated lunchroom setting.⁶¹

Milwaukee's choice program is an example of this generalized national trend. Opponents of the program raised fears that most students fleeing Milwaukee public schools for private schools would be white. In fact, the racial composition of the program is almost identical to that of the public schools.⁶²

Cleveland's story is much the same. Some 19 percent of Cleveland's voucher recipients attend private schools that have a racial composition resembling the makeup of the Cleveland area.⁶³ Only 5 percent of public school students in the Cleveland area are in comparably integrated schools.⁶⁴ In addition, more than 61 percent of public school students in metropolitan Cleveland attend schools that are almost all white or almost all minority.⁶⁵ Only half the students in Cleveland's Scholarship Program are in comparably segregated schools. Integration is not great in either system but is markedly better in the choice program

"Charter schools in Texas are 70 percent minority, while the traditional public schools are only 53 percent minority."

These results are indicative of school choice programs – both public and private – across the country. For example, more than 70 percent of the students in Texas' 178 charter schools are minorities⁶⁶ – 45 percent Hispanic and 29.3 percent African-American – while 53 percent are minority in regular public schools.⁶⁷ [See Figure IV.] [page]

A concern of teachers unions is that competition and choice schools will lower teachers' salaries. Evidence on this question comes from Arizona, which has the most extensive charter school system in the nation. The state has 360 charter schools and virtually any private school can become a charter school, so in effect Arizona's charter school system is a thinly disguised voucher system.

"Charter school teachers earn more than public school teachers and good teachers earn much more."

In Arizona public schools, there is a specific entry salary for every level of education. The salaries vary over a range of about $8,000, with differences based on years of teaching experience. There is little flexibility in pay and no way to reward the more successful teachers. Charter schools, by contrast, are free to set their own salaries and reward systems. The result: charter schools teachers earn more and good teachers earn much more. In the charter schools, beginning teachers earn an average of 6 percent more, while salaries for newly hired teachers vary by $21,000 depending on expertise, experience, education and other credentials.⁶⁸ [See Figure V.]

Many good teachers burn out in the public schools and drop out of teaching altogether. It might be possible to coax that corps of teachers back into the classroom if they could earn higher salaries, face less bureaucracy and enjoy greater safety.

Washington, D.C., has one of the nation's fastest-growing charter school systems. Some 15 percent of D.C. students – about 10,000 children – attend 33 charter schools. Because of the freedom to innovate and escape the bureaucracy of the D.C. Public School system, teachers have flocked from the public schools to charters. According to Paul Vance, school superintendent, "Teachers who have gone from our schools to the charter schools have found the freedom and collegiality which they were promised…. They saw an opportunity to do what they had dreamed of doing, to become unshackled."⁶⁹

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"Students trapped in failing schools have the most to gain from a different kind of school choice."

America has a nationwide school choice system that rations educational opportunity through the housing market. In this market, failing schools have become concentrated in low-income, inner-city urban areas where housing prices are lowest. Students trapped in these failing schools consistently register the nation's poorest academic performances. Thus they have the most to gain from a different kind of school choice and the most to lose under the status quo.

Evidence is mounting that allowing parents to choose a child's school improves the child's test scores. Evidence is also mounting that when public schools are challenged by the prospect of losing students because of the availability of school choice, the academic performance of both the students who leave and those who remain in the public schools improves.

John C. Goodman is President of the National Center for Policy Analysis, and Matt Moore is a policy analyst at the NCPA

NOTE: Nothing written here should be construed as necessarily reflecting the views of the National Center for Policy Analysis or as an attempt to aid or hinder the passage of any bill before Congress.

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1. See Shawna Grosskopf, Kathy Hayes, Lori Taylor, and William Webber, "Allocative Inefficiency and School Competition," Federal Reserve Bank of Dallas Working Paper #97-08, 1997.
2. That premium may be a bargain if it is compared to the present value of 12 years of tuition at an expensive private school.
3. For more information, see Samuel Casey Carter, No Excuses: Lessons from 21High-Performing, High Poverty Schools (Washington, D.C.: Heritage Foundation, 2001).
4. America's worst schools are found in high poverty areas, typically in inner cities. For more information on the association between high-poverty urban areas and low student performance, see Education Week, "Quality Counts 1998: The Urban Challenge," http://www.edweek.com/sreports/qc98/intros/in-n.htm.
5. "Choice in Education: Opportunities for Texas," National Center for Policy Analysis and the Texas Public Policy Foundation, Education Task Force Report, March 1990.
6. Ibid.
7. Ibid.
8. "Prospects: The Congressionally Mandated Study of Educational Growth and Opportunity," 1997, http://www.ed.gov/offices/OUS/PES/esed/prospect.html.
9. Education Week, "Quality Counts."
10. Per pupil expenditures rose 58 percent in real terms during the 1960s, 27 percent in the 1970s, and 29 percent during the 1980s and 1990s. In dollar terms, average real spending per pupil in public schools climbed from just under $2,000 to just over $6,000 from 1960 to 1996. At the same time, the number of pupils per teacher declined from 26 to 17 and salaries for instructional staff increased from $25,206 to $39,451. However, despite the additional resources, test scores continuously declined. Eric A. Hanushek has conducted several surveys of most of the recently published empirical literature and determined that there is no clear relationship between school expenditures and student performance. For more information, see Eric A. Hanushek, Steven G. Rivkin and Lori L. Taylor, "Aggregation and the Estimated Effects of School Resources," Review of Economics and Statistics, Vol. 78, No. 4, November 1996, pp. 611-27.
11. Kate Zernike, "Gap between Best and Worst Widens on U.S. Reading Test," New York Times, April 7, 2000, p. A1.
12. bid.
13. Duke Helfand and Martha Groves, "Gap Grows between Best, Worst Readers," Dallas Morning News, April 9, 2001, p. A1.
14. Virginia Walden, "The Case for School Choice in Washington, D.C.," in John C. Goodman and Fritz E. Steiger, eds., An Education Agenda: Let Parents Choose Their Children's School (Dallas, Texas: National Center for Policy Analysis, 2001), p. 98.
15. "Children in Crisis: Foundation for the Future," report of the District of Columbia Financial Responsibility and Management Assistance Authority, November 1996.
16. Paul Ciotti, "Money and School Performance: Lessons from the Kansas City Desegregation Experiment," Cato Institute Policy Analysis No. 298, March 16, 1998
17. "Building on Progress: How Ready Are States to Implement President Bush's Education Plan?" Education Commission of the States Special Report, Revised March 14, 2001.
18. Roy Appleton, "Charter Schools Face Renewal Test," Dallas Morning News, December 31, 2000.
19. Stacy Smith, quoted in Marc Fisher, "To Each His Own," Washington Post, April 8, 2001, p. W28.
20. Author's interview with Dr. Judith Stein, Executive Director of Magnet Schools of America, a clearing house for information on magnet schools, April 10, 2001.
21. "Overview of Public Elementary and Secondary Schools and Districts: School Year 1998-1999," National Center for Education Statistics, Statistics in Brief, June 2000, http://.nces.ed.gov/pubs2000/2000333.pdf.
22. Ibid.
23. http://www.childrenfirstamerica.org/.
24. Lisa G. Keegan, "Tuition Tax Credits," in Goodman and Steiger, eds., An Education Agenda, p. 74.
25. Robert C. Enlow, "State by State Round-Up," Friedman Report, Milton & Rose Friedman Foundation, Issue 13, 2001.
26. Several school choice programs distribute vouchers by lottery, including those in Milwaukee; Washington, D.C.; Dayton, Ohio; and New York City.
27. Jay P. Greene, Paul E. Peterson and Jiangtao Du, "Effectiveness of School Choice: The Milwaukee Experiment," Harvard University Program in Education Policy and Governance, Occasional Paper 97-1, March 1997, http://www.ksg.harvard.edu/pepg/.
28. Ibid.
29. Cecilia E. Rouse, "Private School Vouchers and Student Achievement: An Evaluation of the Milwaukee Parental Choice Program," Quarterly Journal of Economics, Princeton Department of Economics, January 1998.
30. School Choice: Opponents of Program Have Used His Earlier Work to Argue It Has Failed," Milwaukee Journal-Sentinel, January 9, 2000, p. 1.
31. William G. Howell, Patrick Wolf, Paul Peterson and David Campbell, "Test Score Effects of School Vouchers in Dayton, Ohio, New York City and Washington, D.C.: Evidence from Randomized Field Trials," Harvard Program on Education Policy and Governance, August 2000.
32. Paul E. Peterson, "Impact of School Vouchers on Students and Families," in Goodman and Steiger, eds., An Education Agenda, p. 40.
33. Prepared for the Conference on Charter Schools, Vouchers and Public Education, sponsored by the Harvard Program on Education Policy and Governance and the Manhattan Institute for Policy Research, Cambridge, Mass., March 8-10, 2000.
34. Ibid.
35. Patrick Wolf, William Howell and Paul Peterson, "School Choice in Washington, D.C.: An Evaluation after One Year," Harvard Program on Education Policy and Governance, February 2000.
36. Jay P. Greene, "A Survey of Results from Voucher Experiments: Where We Are and What We Know," Harvard Program on Education Policy and Governance, March 13, 2000.
37. Ibid.
38. Jay P. Greene, "The Effect of School Choice: An Evaluation of the Charlotte Children's Scholarship Fund Program," Manhattan Institute, Civic Report No. 12, August 2000.
39. Ibid.
40. Paul E. Peterson, William G. Howell and Jay P. Greene, "An Evaluation of the Cleveland Voucher Program after Two Years," Harvard University Program on Education Policy and Governance, June 1999.
41. Kim K. Metcalf, "Evaluation of the Cleveland Scholarship and Tutoring Grant Program, 1996-99," Indiana Center for Evaluation, Indiana University, September 1999.
42. Joshua Angrist, Eric Bettinger, Erik Bloom, Elizabeth King and Michael Kremer. "Vouchers for Private Schooling in Colombia: Evidence from a Randomized Natural Experiment," Massachusetts Institute of Technology, November 2000.
43. National Center for Education Statistics, 1998, http://nces.ed.gov.
44. Janet R. Beales and Thomas F. Bertonneau, "Do Private Schools Serve Difficult-to-Educate Students?" Mackinac Center for Public Policy and the Reason Foundation, October 1997.
45. Dorman E. Cordell, "Choice and Accountability: Texas Leads the Way," National Center for Policy Analysis Brief Analysis No. 259, March 10, 1998.
46. Ibid.
47. Peterson, Howell and Greene, "An Evaluation of the Cleveland Voucher Program after Two Years."
48. Nina S. Rees, "Public School Benefits of Private School Vouchers," Policy Review No. 93, January-February 1999.
49. Susan Lee and Christine Foster, "Trustbusters," Forbes, June 2, 1997, pp. 146-52.
50. Howard Fuller, Introduction to Carol Innerst, "Competing to Win: How Florida's A+ Plan Has Triggered Public School Reform," Center for Education Reform, Washington, D.C., April 2000, http://edreform.com/school_choice/compete.htm.
51. Jay P. Greene, "An Evaluation of the Florida A+ Accountability and School Choice Program," Manhattan Institute Center for Civic Innovation, February 2001.
52. Innerst, "Competing to Win."
53. "The ABCs of School Choice," pamphlet, Milton & Rose Friedman Foundation (no date).
54. Innerst, "Competing to Win."
55. Dorman E. Cordell, "The Voucher Wars," National Center for Policy Analysis, Brief Analysis, No. 264, April 29, 1998.
56. "Cleveland Schools Profit from Scholarship Program," Policy Note, Buckeye Institute for Public Policy Solutions, June 1997.
57. Lee Cullum, "Dallas Schools Ready to Become Free," Dallas Morning News, April 2, 2001, p. 13A.
58. Ibid.
59. Jay P. Greene, "Civic Values in Public and Private Schools," in Learning from School Choice (Washington, D.C.: Brookings Institution Press, 1998), pp. 96-97.
60. Ibid.
61. Jay P. Greene and Nicole Mellow, "Integration Where It Counts: A Study of Racial Integration in Public and Private School Lunchrooms," Texas Education Review, Spring 2000.
62. Joe Williams, "Audit Dispels School Choice Myths," Milwaukee Journal Sentinel, February 3, 2000.
63. Greene, "A Survey of Results from Voucher Experiments," p. 21.
64. Ibid.
65. Ibid.
66. Texas Education Agency Online, "Texas Charter Schools: FAQs." http://www.tea.state.tx.us/charter/faq.html#top.
67. Cordell, "Choice and Accountability."
68. Lewis Solomon and Mary Gifford, "Teacher Accountability in Charter Schools," National Center for Policy Analysis and CEO America, Brief Analysis No. 285, March 1, 1999.
69. Fisher, "To Each His Own."