school choice: can it improve the quality of education in america?

To Accompany “Economics: Private and Public Choice 13th ed.” James Gwartney, Richard Stroup, Russell Sobel, & David Macpherson

Slides authored and animated by: Joseph Connors, James Gwartney, & Charles Skipton

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School Choice: Can It Improve the Quality of Education in America?

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Educational Spending and Student Performance



• In recent decades, Americans have been concerned about the poor performance of students and rising costs of education. The numbers tell the story.

Educational Spending and Student Performance



Average SAT Test Scores

• The achievement scores of U.S. students dropped in the ‘70s, changed little in the ‘80s, and have risen modestly since.

Combined SATTest Score

1967 1970 1975 1980 1985 1990 1995 1999

980

1000

1020

1040

1060

2005 2007



A Cross-Country Comparisonof Average 8th Grade Math Scores

• The mathematics achievement scores of eighth grade American students lag behind those of many other countries.

Canada

Australia

Germany

Austria

Country average

Belgium

Poland

Average 8th Grade Mathematics Achievement Score: 2006

France

Italy

U.K.

Japan534

527

516

511510

500

498

U.S. 489

495

475

515

531

Hungary 504



Real Spending Per Pupil

• Real spending per pupil on public elementary and secondary schools more than doubled during the 1970-2005 period.

Real Spending per Elementary & Secondary Pupil(in 2005 dollars)

1970 1975 1980 1985 1990 1995 2000

$ 4,000

$ 6,000

$ 10,000

$ 8,000

2005



A Cross-country Comparisonof Spending Per Primary Pupil, 2005

• Spending per primary student in the United States is among the highest in the world.

Source: OECD, Education at a Glance, 2001.

Hungary

Korea

France

Germany

Australia

U.K.

Japan

OECD Average

Belgium

Italy

Sweden

$ 4,438

$ 4,691

$ 5,014

$ 5,365

$ 5,992

$ 6,252

$ 6,361

$ 6,648

$ 6,744

$ 6,835

$ 7,532

$ 9,156U.S.



Economics and the Structureof the Educational System



• Economic analysis indicates the structure of the educational system may well be a contributing factor to its high cost and poor student performance of recent decades. • Education is largely provided by

government-operated firms with substantial monopoly power.

• Competition is largely absent; educational consumers have limited choice among schools.

• Because it is costly for parents and students to shift away from low-quality schools, they are in a weak position to discipline and direct schools.

Economics of the Educational System



• Public school administrators have a strong incentive to expand their budgets by seeking additional funding from budgetary agencies, but have a weak incentive to cater to the views of parents and students.

• This structure is likely to result in higher schooling costs and a disconnect between the quality (and structure) of schools and the preferences of educational consumers.

Economics of the Educational System



Questions for Thought:

1. “The best strategy to reverse the decline in student performance in recent decades is to increase spending on education.” -- Evaluate this statement.

2. “Public school administrators have strong economic incentives to operate efficiently.” -- Evaluate this statement.



Alternative Ways ofIncreasing Competition andExpanding Consumer Options



• Under a pure voucher plan, rather than financing schools directly, the government would provide students with a certificate equal to the current expenditure per pupil.

School Vouchers



• Advantages:• A voucher plan would put competition to

work to improve our schools. • A voucher system would also encourage

diversity, which would allow a larger number of Americans to choose a type of schooling that is more consistent with their preferences.

School Vouchers

• Objections:• Beneficiaries would be high income families. • Racial imbalance might increase.• Funds would be drained away from public

schools, causing them to further deteriorate. • A voucher plan targeted towards low- and

middle-income families would eliminate these objections.



• Charter schools are publicly funded but are run independently from the traditional public school system. • Charter schools operate under a contract

(“charter”) with a government agency. • Charter schools differ from voucher programs

in some dimensions. • Religious schools are not permitted to be

charter schools, while vouchers are sometimes permitted to be used at such schools.

• Charter schools are not permitted to charge tuition as all of their students are subsidized by public funds.

Charter Schools



• Alternatively, parents with children in failing schools could be provided with vouchers.• Students would get a voucher to cover the

cost of education at an alternative private school or let parents choose another public school if their public school fails.

Choice for Studentsof Failing Schools



The Effect of Structural Change



• Thus far, movement towards school choice has been modest. Preliminary findings indicate:• The achievement scores of African-American

students tend to be higher after one to two years in voucher programs.

• The impact of charter schools on student achievement is inconclusive.

• Most parents of students in charter schools and voucher programs indicate they are highly satisfied with their children’s schools.

• Targeted voucher programs tend to increase racial integration in schools in highly segregated communities.

Impact of Structural Change



Questions for Thought:1. Should parents have the right to choose which

school their children attend? Discuss.

2. Suppose that statistical studies indicated that additional choice did not change student performance, but that it did improve student and parental satisfaction with schools. Would these findings strengthen the case for school choice?



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school choice: can it improve the quality of education in america?

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