Here’s What’s So Bad About School Choice

Courtesy of Ed Hughes School Blog

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











Total Students


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.

Forward Seeking Related:
Diane Ravitch Unplugged @ Duke University 

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