Private School Spending

New out today (copy of press release):

Ground-breaking study has major implications for public school spending and voucher programs

Contact: Teri Battaglieri – (517) 203-2940;
Bruce Baker – (732) 932-7496 ext. 8232;

EAST LANSING, Mi., (August 18, 2009) – Private school spending varies far more widely than spending on public education, a new report finds. Further, the differences in spending among different parts of the private school sector reflect clear patterns with major implications for voucher policies and even for spending levels in the public sector.

Those are some of the findings in a first-ever, comprehensive examination of some 1,500 private schools nationally conducted by Rutgers University associate professor and school finance expert Bruce D. Baker.

The report, Private Schooling in the U.S.: Expenditures, Supply, and Policy Implications, is based on a review of financial and enrollment information contained in IRS tax returns combined with data from the National Center for Education Statistics. It was released today by the Great Lakes Center for Education Research and Practice.

Baker presents comparisons of expenditures among different types and affiliations of private schools, and compares those expenditures with public school expenditures for districts in the same state and labor market. Results indicate that (1) the less-regulated private school sector is more varied in many key features (teacher attributes, pay and school expenditures) than the more highly regulated public schooling sector, (2) these private school variations align and are largely explained by affiliation—primarily religious affiliation—alone, and (3) a ranking of school sectors by average spending correlates well with a ranking of those sectors by average standardized test scores.

“On average,” Baker explains, “the private schools studied spend more than public schools in the same metropolitan areas (and nationally), although some spend much less. Some private schools have lower pupil-to-teacher ratios than public schools, while others have comparable ratios. Some have comparable teacher salaries, and some pay their teachers much less. And, some have teachers with stronger academic qualifications than public school teachers, while others have teachers with weaker academic qualifications.”

What’s “most striking” about such patterns, Baker observes, is that they are largely explained by religious affiliation alone. Christian Association Schools have the lowest spending, the lowest salaries, teachers with the weakest academic records, and the highest pupil-to-teacher ratios. Moreover, earlier research concludes that these schools have the lowest student test scores. Catholic schools tend to approximate public schools in all these areas. Hebrew schools and independent day schools (generally not religiously affiliated) have higher spending – often substantially higher – and this is reflected in these resource categories.

Baker’s findings may provide some insights into why research on voucher programs has yielded mixed results regarding student achievement levels for participating low income students. The potentially high-performing parts of the private school sector are the ones that spend much more than available voucher subsidies. In fact, they spend much more than public schools. Private independent day schools—which have the academically strongest teachers and the smallest classes among private schools—will, Baker points out, “remain well out of reach of voucher recipients.” In many markets, such schools on average spend twice what public schools spend, which in turn is often twice the voucher levels allocated. Thus, even under a voucher scheme that paid what public schools receive per pupil, these private schools would have to subsidize half the total cost of teaching voucher students to match what they spend on their non-voucher students.

Baker recommends that policy makers who would look to private schools for lessons on how to improve public education begin with a clear awareness of the stark differences among subsets of private schools, avoiding policy recommendations based on averages or isolated instances. He also points to the importance of understanding the differences between private school spending and tuition, given that spending is often subsidized by outside resources (which themselves are often taxpayer subsidized). Regarding voucher policies, policy makers need to understand the tradeoff between attempts to craft policies with a limited impact on the public treasury and to craft policies that provide real choice to voucher recipients. Current policies appear to sacrifice choice for fiscal prudence, but this report demonstrates that the result is access to only a couple parts of the private sector, both of which have strong religious affiliations and neither of which appears to offer academic benefits over public schools.

Find Bruce Baker’s report, Private Schooling in the U.S.: Expenditures, Supply, and Policy Implications, on the web at:



  1. Bruce — interesting study. Good work. So the major implication is that 1) not all private schools are created equal; 2) some private schools outspend other private schools; 3) this dis-equal spending is largely a function of what parents in certain areas are willing to spend for education and what others are not willing to spend. Hmmmmm…. sounds alot like public school finance with just a different funding source. Is it possible that there is a spatial sorting among private schools, and instead of geography, this sorting is more done along the lines of cost of the private school (read, wealth of parents) and the relative differences in student achievement between private schools is not as much a function of teacher quality but more a function of SES? Again, a classic public school argument applied to a private school setting???

    Hope all is well at Rutgers. We miss you here in tornado alley.

  2. Mike,

    Thanks for the comments. The interesting twist with private schools is that it has largely to do with affiliation and/or stratification of the private school sector, within any given labor market. It’s not necessarily the case that the high spending schools are clustered in high wealth neighborhoods, or that affluent parents send their child to the nearest private school regardless of affiliation, and driving the price point based on location.

    Rather, private independent day schools are in the elite and high spending strata and will draw from across a metro labor market, parents interested in and able to afford that type of education. That’s Pembroke and Barstow in KC, who do split their market north/south. Catholic diocese schools are geographically organized. Conservative christian schools tend to be scattered, along with their related churches. Spending patterns are defined by these strata much more than by location.

    The no duh finding here is that the less regulated private market is simply more varied than the more regulated public market. That’s just how regulation works – it narrows the variance.

  3. You raise an interesting point (I take a slightly different view), and one that has a spatial element — while not a perfect alignment, I would guess that because private schools are market driven, that higher spending private schools are generally located in areas of greater wealth, and lower spending private schools are located in areas of lessor wealth. It is the same type of spatial sorting that we generally see with public schools, except that the mechanism for sorting is different, the outcome is still the same.

  4. Indeed there is a spatial element, but it is perhaps more like identifying where to set up a service oriented business which families must visit daily during the school year (centroid of a geographic commuting space that differs from school district boundaries). Public school quality may influence the private independent school choice, but selection of other types of schools is driven by religious preference. Many old private independent schools are and/or were located in neighborhoods that have since changed. Some have actually moved (a long time ago, Barstow was a girls school in downtown KC, I believe). One of the schools out here – Pingry – moved west in the early 1980s. But there’s also overlap of the sending radius – kids closer to Pembroke who attend Barstow, etc. The wealth of the immediate neighborhood is not always the primary driver.

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