Here’s What’s So Bad About School Choice

This week’s Isthmus includes an opinion column by Larry Kaufmann entitled “What’s So Bad About School Choice?”   Mr. Kauffmann is identified as “an economic consultant based in Madison.”  I bet Mr. Kaufmann is really smart in a lot of ways.  But this column of his seems strikingly misguided.

In a nutshell, Kaufmann argues that our public schools have failed.  Public education “is one of the most unproductive and underperforming sectors in America.”  Spending on schools has gone up but “students’ combined math and reading scores have been flat.” Hence, our educational productivity “has fallen by 50% since 1970.”

If all you have is a hammer, every problem looks like a nail.  Kaufmann apparently is an economist and his preferred solution to what he sees as the underperformance of the educational-output industry is to unleash the magic of the market.

Specifically, his answer is unfettered school choice.  Instead of shoveling money down educational sinkholes, parents should be given vouchers to purchase educational services from whomever they choose.  Kaufmann assumes that parents as consumers will choose wisely; innovative and efficient schools will flourish; less effective schools will exit the market; and math and reading scores will soar.

I think this is mostly hooey.  I do agree with Kaufmann that “School choice . . . deserves serious attention rather than knee-jerk condemnation.”  So, let’s give it some serious attention.  Let’s first dispose of a couple of relatively minor points and then focus on three pretty significant flaws in the school choice theory.

“Educational Productivity”: Students Are Not Cars

Kaufmann’s conception of  “educational productivity” – some measure of students’ academic achievement divided by the cost of their schooling – is out of whack.  We do not measure cost of educational outcomes the same way we measure the cost of the assembly line production of a car.

For one thing, we don’t think much about how the car feels about the manufacturing process.  For education, the means as well as the ends are important.  We may value providing opportunities like a student orchestra and be willing to pay for it, even if it doesn’t pay off in increased reading or math scores.

Kaufmann’s proposed benefit-cost ratio suffers from the bane of economic reasoning – it inevitably overvalues whatever can be quantified and undervalues what cannot.

The Value of Spending Depends on What You Buy

Next, Kaufmann abruptly dismisses additional spending on schools as a strategy for improvement.  He writes, “Easy answers like spending more money also won’t fix the problem; that approach has been tried for the last two generations and has manifestly failed.”

This over-generalizes to mislead.  Spending money on strategies that don’t work doesn’t work.  Spending money on strategies that do work does work.  The answer isn’t to cease spending on education entirely, it’s to start spending money on education more wisely and effectively.

The Silver Bullet: Vouchers All Around!

Kaufmann’s principal point is that we would be well-served by delegating our educational policy to parents empowered to select any schools for their children through a voucher system.  As he writes, “School choice involves giving public education funds directly to parents to ‘purchase’ educational services from a variety of schools.”

Problem 1: The Demand for Competent Parents Exceeds the Supply

There’s a problem with this right out of the box.  Kaufmann’s focus is on empowering the education consumer, whom he assumes are parents.  But the actual consumers of educational services are children.  Parents stand in as proxy decision-makers for their children.  Unfortunately, not all children are favored with competent and involved decision-makers on their behalf.  We might consider this a market failure.

Choice advocates tend to ignore this fact.  Students without effective parent/guardian advocates do not exist for them.  But they do exist for our public schools, and these children are entitled to an education of the same quality as we provide to children who had the foresight to choose more competent parents.

Problem 2:  What We Give In Profits, We Take from Services to Needier-than-Average Students

The voucher approach seems to me to be flawed in at least two more fundamental ways as well.  Here’s how I understand the approach might work in the Madison School District if Kaufmann were king.  We’d figure out how much we currently spend on educating our roughly 24,000 students.  Let’s assume it’s $288 million.  We’d then calculate our per-student cost, which in this example is $12,000.

Rather than letting the School Board decide how to spend the $288 million, we’d de-centralize the decision-making and give the parents of each student a voucher valued at  $12,000 to pay for the student’s education at whatever school the parents choose.  As Kaufmann writes, “School choice involves giving public education funds directly to parents to ‘purchase’ educational services from a variety of schools.”

An immediate problem arises because there is a broad range in the per-student cost of education.  A middle class student with no special needs and no special classes who walks to school and brings her own lunch will cost the school district less than $12,000 per year.  A profoundly disabled student who needs a personal aide at all times will cost the district far more.

Let’s assume that we can divide the district’s 24,000 students into five categories of per-student annual cost, as follows:

Per-Student Annual Cost

Number of Students

$8,000

4,000

$10,000

6,000

$12,000

9,500

$16,000

4,000

$24,000

500

Total Students

24,000

Now, let’s assume that we give the parents of each student a $12,000 voucher and sit back to let the market work its wonders.  What’s likely to happen?

Entrepreneurs will swoop in to offer appealing opportunities geared toward the students who are less expensive to educate.  K12, Inc. is already doing this with its virtual charter schools, like McFarland’s Wisconsin Virtual Academy.

The difference between the $12,000 voucher amount and the actual cost to educate these carefully-selected less-expensive students will be the measure of the entrepreneurs’ profits, which represents public funds earmarked for education that are not going to be spent on education.

On the other hand, we’ve got 4,500 students who are more-expensive-than-average to educate.  What will happen to them?  The voucher amount won’t be enough to pay for the education they need.  The increment above $12,000 that is needed to provide them with their education will instead have been diverted into the profits earned by K12, Inc. and its competitors.

In our example, if K12 and its competitors serve the 10,000 students who are less expensive to educate, they’d reap profits of $28 million, assuming their costs are the same as the school district’s.  Whoever is left to educate the 4,500 students who are more expensive to serve (hello, school district!) will find themselves $28 million short, and the quality of education those more needy students receive will be correspondingly lower.

The process would not actually unfold in the real world the way I sketch it here.  K12 and its competitors would not be able to target and win the business of all students who are less expensive than average to educate, for example.

But the larger point seems valid.  If we view the school district as a business, the less-expensive-to-educate students currently subsidize the education of their more-costly-to-educate classmates.  If the market were thrown up for grabs through the voucher approach, those subsidies would be reduced as the K12s of the world peel off the less-costly and hence more desirable students and our more needy and costly students would likely end up paying the price.

Problem 3:  The Driver for Parents’ School Choices Is Not Always Educational Quality

There’s another fundamental problem with this approach as well.  In our economic system, consumers demonstrate how much they value an item by how much they are able and willing to pay for it.  A best-selling toothpaste demonstrates it’s the superior product by the very fact that more consumers decide to buy it rather than rival brands.  Kaufmann believes the same dynamic should be at work for schools.

But society has a strong interest in well-educated young people prepared to assume the responsibilities of citizenship.  This is the job of our schools.  Hence we have far more of a stake in the choices parents would make for their students’ schools than we do in their choices of laundry soap or cat food.

Before we hand over responsibility to parents for determining what kinds of schools will educate our next generation of citizens, we ought to have confidence in the values that will inform their decisions.

This doesn’t seem to be much of a concern for Kaufmann.  He writes that “parents concerned for their children’s welfare are highly motivated to choose wisely.”  He implicitly assumes that the values that parents apply in selecting schools for their children are the same educational values that we embrace as a society.  Accordingly, we can assume that thousands of individual parental choices will have a cumulative impact that reflects the values that we share as a community.

Further, since the end goal is academic excellence, we can also expect that the objective measures of educational achievement available to us, like standardized math and reading scores, will be of critical importance to our choosing-wisely parents.

   a.     A real-world example from Fitchburg

How would this actually play out?  We have some experience of that here in Madison.  Some folks living in a neighborhood of Fitchburg have been pushing to detach from the Madison School District and instead join the Verona School District.  Currently, students in the neighborhood attend Leopold Elementary, Cherokee Middle, and West High.  If they are successful in attaching to Verona, neighborhood children would instead attend Stoner Prairie Elementary, Savannah Oaks Middle, and Verona High Schools.

To go by the effort that this entails, these parents are clearly quite motivated.  If they are choosing wisely by Kaufmann’s standards, reading and math scores must be considerably higher at the Verona schools.

Let’s take a look.  But first, I’m going to make the assumption that the parents interested in moving are white.  It’s just a guess, but useful for these purposes.

  b.      Test scores and demographics 

Let’s compare WKCE scores for white students at the schools.  The category of interest should be the percentage of students who test in the “advanced” category on the WKCE.  For the high schools, we only have 10th grade WKCE scores available, since that is the only time the test is administered.  For the other schools, we should look at the scores of the oldest students – 5th graders in elementary school and 8th graders in middle school – since their test results best represent the cumulative effect of attending the schools.

Percentage of White Students Scoring in the Advanced Range on the November, 2010 WKCE test.

  5th Grade Leopold 5th Grade Stoner Prairie
Reading 76.9% 70.3%
Math 76.9% 81.1%

 

  8th Grade Cherokee 8th Grade Savannah Oaks
Reading 72.7% 67.3%
Math 61.8% 55.1%
  10th Grade West 10th Grade Verona
Reading 81.1% 57.3%
Math 53.5% 40.1%

Averaging across the three schools, 76.9% of white Madison students scored at the Advanced level in reading, compared to 65.0% of Verona white students.  For math, the comparable percentages were 64.1 for Madison and 58.8 for Verona.  The difference carries through high school.  White students at West had an average composite score of 26.6 on the most recent ACT, while white students at Verona had an average composite score of 24.6.

So, we know that the parents in the Fitchburg neighborhood pushing for a change are interested in the quality of the education provided at the schools their children will attend. If they are white, as I have assumed, then the test results should make them thank their lucky stars that they’re in the Madison school district.

They are not thanking their lucky stars.  Instead, the parents are clamoring to get their children re-assigned to the lower-achieving schools. What else might be at work here?  Let’s do another comparison.  Let’s look at the percentage of the white students at the different schools:

Leopold – 28.2%

Cherokee – 35.5%

West High – 55.3%

Stoner Prairie – 60.9%

Savannah Oaks – 63.1%

Verona High – 74.2%

     c.      Occam’s razor

I wonder what inferences Kaufmann would draw from these data.  The inference I draw is that the school choices that parents make for children do not necessarily turn upon objective measures of student achievement and educational quality.  Instead, these considerations can be trumped by parents’ preference for their children to have classmates who look like them.

If we as a society decide that we don’t put much weight on homogeneity as a value in judging schools, then we stand to lose by putting more of the responsibility for rewarding preferred schools and punishing disfavored ones in the hands of parents.

All-in-all, Not Such a Great Idea

School choice would be financially beneficial for parents who do not wish to send their children to public schools.  It would also prompt the development of a wider range of non-public school options

But the economic argument for school choice, as articulated by Kaufmann, has problems from both the supply and demand sides of the market.  From the supply side, alternative school options seem unlikely to emerge for students with more costly needs.  Instead, new entrants into the school market are likely to concentrate on cream-skimming less costly-students from the public schools, diverting into profits the funds those public schools require to meet the needs of their more costly students.

From the demand side, not all students will have parents capable of making informed choices on their behalf.  For those that do, the values that drive their parents’ decisions may well be ones that take our schools further from the types of diverse, welcoming and vibrant communities of learners that can best prepare our young people for their future careers and the responsibilities of citizenship.

There are certainly inefficiencies in our current public school structure.  But not all changes would be for the better. An embrace of unfettered school choice is likely to make matters considerably worse.

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14 Responses to Here’s What’s So Bad About School Choice

  1. Arvid Berge says:

    Thanks for the analysis. I’ll be passing this along.

  2. Thanks Ed! It’s wonderful that we have someone with your ability to see through the rhetoric on our BOE in Madison. Too bad you’re not running the U.S. Department of Education.

  3. Carol Carstensen says:

    An economist comparing scores in 1970 with present day scores should make sure that the comparison is apples to apples. The student body today includes many who were not part of those tested in 1970: those with special education needs; a greater number of immigrants whose first language is not English and a greater range of students generally since students must stay in school until age 18 in most states today – and in 1970 they could leave at age 16 – or even 14.

  4. Great analysis Ed! Sound, reasoned, and data driven. Outstanding. Keep up the good work on the School Board, and thank you for dedicating all of the time that you do to serve in that capacity.

  5. Lacuna says:

    Compelling. I cannot begin to assert the meaningfulness of my daughter’s encounters with “special needs” kids she has shared a class with. They have been some of the most profoundly compelling encounters in her life. Charter schools, to attract that lower cost student will offer incentives. The incentive will inevitably be high grades. With a hodge podge of privately run schools, our kids will slowly lose out on their ability to access the best Universities as they currently do. The charter schools that require additional payments, subsidized private academies will take all of the well off kids, i.e.: UW Professor’s Children’s Charter, and the rest of us will flounder.

  6. Mary Jackson says:

    I work for a choice school in Milwaukee. You’re right on target with your analysis!

  7. Skoolmarm says:

    You make a strong argument here, especially when it come to “white flight” but, it still leaves me with questions. In large urban districts, many charter schools are not “marketing” toward the less expensive easy to educate middle class student. Parents in high-poverty communities with public schools that are low achieving, violent, and degrading to students of color have little to no choices around education due to personal limited financial resources. Is it fair to provide only one option in this case to parents who have no means to make the choices they deem appropriate for their children? If they feel their children will be respected, held, valued and will learn better in a school other than their public option should they not be allowed to make that choice? In the end does it matter where a child learns or if they learn?

  8. This is an important topic that too many people understand far too little.

    In Alberta, Canada, we have a very strong public education system with only some charter or private schools. However, we have a right-wing political party called the Wild Rose who are pushing for school vouchers to empower more school choice for parents.

    Your analysis debunks many of the myths that surround choice.

    You might be interested in reading Pedro Nogueara’s take on school choice: http://www.thegrio.com/education-1/the-trouble-with-school-vouchers.php

  9. mad4madison says:

    Ed –

    As always, thanks for the information. I am sure I will be one of the few posters to challenge your reasoning and logic in a few places.

    1) While you can argue that it is not accurate to measure student productivity like cars, I would ask you how do you measure productivity? Test scores? Ratio of cost to test score? Ratio of teacher education to student test score? The pitfall that we all can fall into with this discussion is that due to the absence of an agreed to measure, we all use one that reflects what we want to see. It is kind of like the rorschach test, you see what you wish to see. We all want high performing children. I would also state that we want the most efficient means to get that effective result.

    2) While it can be classified as overly generalized, there is no doubt that we are spending more today on education than in the past and that by any measure our schools are under performing against other nations. I understand the logic behind needing to compare “apples to apples”, but those comments simply obfuscate the issue. It costs more to educate our children today than in the past.

    3) The myth of “White Flight.” This is one that absolutely puts me over the edge. The reality that I see is that the decision to change schools is in no way related to the color of anyone’s skin. Rather it is the disruption in class, the physical safety of the kids, the lack of attention given to the “average” kids, the clustering of special needs, the lack of discipline in the schools and the class sizes that are available in other communities or private schools. I challenge anyone to illustrate that the movement of children is based on color. In full disclosure, my children were given the opportunity to transfer out of MMSD into a neighboring community. My wife and I discussed this at length and decided to keep our children in MMSD. I assure you that the decision to leave or not and the eventual decision to stay had NOTHING to do with the color of my children’s skin or the color of their classmate’s skin. I would remind you and the Board that you allowed the administration to violate law and not have honors classes for 9th graders at a certain high school. The reason given as to why it was not offered – cost and local teacher resistance. So if I chose to move my students to another district that offered honor classes and I happened to be white, you would say I left due to “White Flight?” Really? Then I guess I could say I left because you broke the law. And both really aren’t true, are they?

    4) Parents – yes, this is the key. But the parents are being placed into a challenging position too. My children are “average” – although I think they are pretty gosh darn special! 😉 What is happening in class is that the high end and the low end get the resources that they need, while the middle performers do not. This is the way that some educators and administrators are looking to close any achievement gaps (minority, low income, etc) is to bring the distance closer – not improve across the board. So the parents jump in and help. A very simple fact is that since my time in school, the need for parental involvement has increased dramatically. My personal opinion is that parental involvement is required because the educators cannot teach every child due to class size, a lack of time and a lack of specialized support. I can provide specific examples of a child with a discipline issue disrupting class on a daily basis and being sent to the principal, only to sit for a time and then return to class. Only then to repeat the same behavior.

    5) Extras – I like your example of orchestra. My son played participated in the Strings program and played through middle school. But as much as I value orchestra, I would rather my son know how to read than how to read music. And this gets to the heart of the comments. Extras have value. But their “relative value” is less than core classwork. And when it comes time to cut or spend additional monies, invest in core. If I value the orchestra, then I can support it with my time and money. If I value the chess club, the service club, the football team – anything, let me support it. I am not asking that the school remove support – those additional value experiences are needed. But they should not come at the cost of core. And when you boil some of the views down, this becomes the root – improve on the core.

    As I have said before, while we may agree or disagree, I do appreciate the blog.

  10. We only have to look to the Milwaukee voucher system for real-life examples of exactly the kind of systemic discrimination Mr. Hughes is writing about. Civil rights groups including the ACLU of Wisconsin recently filed a federal complaint on behalf of students with disabilities (http://forwardforliberty.com/2011/06/20/voucher-schools-have-created-a-separate-unequal-system/). In Milwaukee, private and charter schools do not provide services to students with disabilities while at the same time boast about how cheaply they can run their schools. When these schools are in the practice of denying or discouraging students with disabilities admission in the name of cost-effectiveness, families have no other choice but to return to the public system. This has created systemic segregation.

    Hughes makes another important point about how private or semi-private “choice” schools are motivated by profit to serve the students with the fewest needs. In the Milwaukee voucher system, an average of 83% of the students in these private or charter schools attend with a tax voucher. There are many schools in which all or nearly all students are voucher students. Performance measures such as test scores show similar or worse results when compared to public schools. These voucher schools would fold were it not for the tax vouchers propping them up. Tax dollars should fund public education that serves all students. This is not the case in the Milwaukee Parental Choice Program.

    – Stacy Harbaugh, ACLU of Wisconsin, Madison Area Office

  11. Ted Lewis says:

    Thank you for this comprehensive explanation of the pitfalls of school “choice.” Whether it is the voucher program in Milwaukee, or the private charter schools of NY, DC, Chicago, etc., the expansion of public dollars for independently run schools has undermined education in many cities. Here in Madison, we should increase our investments in what works and further explore how to bolster public education for all kids, rather than go down a path of proven failure.

  12. Torrey says:

    Ed,

    I appreciate the thought you put into your analysis. Please allow me to point out what I see as some of the failings in your argument.

    First let me point out that no doubt there are some practical problems to implementing a broader, universal voucher education system. Frankly, there are practical problems to implementing our current system as well (it is a monopoly which raises its own whole host of negative side-effects which all monopolies do). When you are talking about a $500 billion industry, there are going to pluses and minuses to any structure that is implemented. What we need to do is weigh the pluses and minuses of each system to see which will produce the best results in the most efficient manner.

    You had correctly stated that “Unfortunately, not all children are favored with competent and involved decision-makers on their behalf.” Ed, we both agree that this is true. What percentage of parents do you feel fall into the competent category? I am going to assume that you have a fair deal of faith in your fellow man, and that we can both agree it is well over half. Unfortunately it appears you would rather take choice away from ALL parents, including the great majority who WOULD make wise decisions for their children, all because SOME parents would make poor choices. Instead you would substitute the state’s judgment for ALL parents in order to protect the children with incompetent ones.

    But here’s the kicker: Aren’t there children in bad public schools now? Yes – just as there are children in bad charter schools and bad private schools (and children in great public, charter and private schools too). You seem to be assuming that if we have a no-choice public school model that no children will be in bad schools because the state will protect them from such, but that in a choice-based system some kids would unfairly attend poor schools. The fact is, in EITHER type of system SOME children will be in bad schools.

    I would argue that it is more fair – and more moral – to allow parents to have choice, and have any kids who do fall into a bad school be there due to choice, rather than due to state coercion. At a minimum, at least they would have a way out if and when the parents wise up. I find that situation far more acceptable than confining a child to a poor school through state coercion.

    Therefore I find your argument that “choice is bad because some children will wind up in poor schools due to bad choices” to fail, because some children will wind up in poor schools in ANY education system. It’s simply a matter of whether they are there due to choice or coercion.
    Your second argument revolves around a fear that private schools will choose to educate only the easiest children, and therefore reap excess profits. However, you seem to be ignoring the fact that the vast majority of private schools out there right now are nonprofits. But let’s assume in an unfettered voucher world that for-profits start to grow to a bigger share of the market. Does your argument still hold up?

    I believe your analysis on this argument is too simplistic. First you assume that if MMSD spends $12,000 per student on average, then that’s what every voucher would be worth. In reality, where vouchers do exist they are typically worth far less than the district’s average per pupil expenditures. For example the Milwaukee vouchers are worth about $7,000 while MPS typically spends well over $10,000 per student. If vouchers work that is actually a savings for taxpayers.

    Second ,there is no reason to assume that each voucher would have to be worth exactly the same amount. When a special needs student utilizes open enrollment to transfer from MMSD to a Verona school for example, does MMSD transfer the same amount of money to Verona as they would for a non-special needs student? I would think not. There is no reason that a voucher value couldn’t in part be determined by several different factors, including the student’s status (special needs, etc.). In simplifying the example to one static voucher value you set up a straw man argument that is easy to knock down – but nothing says the voucher value can’t account for the factors you point out that impact the cost to educate any particular student.

    And again, you assume that the universe of private schools includes mostly profit-seeking entrepreneurial firms. That simply does not reflect current reality (although that admittedly could change down the line).

    You had stated “Before we hand over responsibility to parents for determining what kinds of schools will educate our next generation of citizens, we ought to have confidence in the values that will inform their decisions.” To me, as a parent, that is a very frightening statement. Ed, it is not in your power to hand over to parents responsibility relating to how their children will be educated – they already have that responsibility as a result of being parents in a free country! And think about the implications of what you just said. Think of all the things parents decide for their children. By your logic, the state could have an interest in dictating lots of decisions parents currently make for their children, including what to eat, what religion to practice (or not), the values to teach their children.. The list goes on.

    That statement is quite elitist in its thinking (WE know better than parents do), and quite contrary to the ideals and values that our free country was founded upon. Think of how frightening that statement would be if you modified it to apply it to democracy itself:
    “Before we hand over responsibility to citizens for determining what kind of government will preside over our next generation of citizens, we ought to have confidence in the values that will inform their decisions.” In other words, if the state doesn’t trust the citizens to vote the way they think they should, the state is justified in taking that right away. Scary stuff.
    Ed, you had stated that “the school choices that parents make for children do not necessarily turn upon objective measures of student achievement and educational quality. Instead, these considerations can be trumped by parents’ preference for their children to have classmates who look like them.” That first sentence is entirely correct, but your second sentence is pure conjecture. Many, many factors go into a parent’s determination of school (district) choice, beyond the objective measures of student achievement and educational quality. For you to assume broadly that it is based on race is quite unfair.

    Finally, it is my belief that most people generally prefer bottom-up approaches to imposed top-down approaches. Choice is a bottom up approach while our current system is top-down. When you look at every other service or product in our economy, the key driver of innovation, differentiation, variety, and efficiency is market-based competition. It is therefore a logical argument that a little competition would actually help our educational system and improve student outcomes, rather than lead to the dire consequences you spell out.

    Thanks for entertaining my opposition, and for the time and effort you put into your blog.

  13. Larry D. Nelson says:

    Mr. Hughes, I can see that School Choice is bad for the MMSD and I am afraid that it is going to get worse. I too have reviewed the comprehensive information on the Public Instruction website and I have compared a number of schools against those serving my neighborhood. The white children are performing about the same in all the schools.

    I will not fault parents for sending their children to another school district anymore than I will fault them for moving their residence to another school district. Nor will I fault them for getting their children into Spring Harbor Middle School, with its higher academic standards. The majority of our Middle School Principals have elected not to live in the MMSD. I think their actions are pretty persuasive.

    I don’t think parents will wait around to see if the MMSD can get it together: children grow up to fast. And, the discussion regarding Madison Prep turned pretty ugly, which we just didn’t need right now.

    Thanks for all your work.

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