Incompatible Policy Preferences: Comparability & Expanded Choice

Another excerpt from forthcoming work:

In a 2015 article in the journal Education Finance and Policy, Ken Libby, Katy Wiley and I discuss similar findings regarding charter schools in New York City and Houston. Specifically, we found that New York City charter schools both served less needy student populations than nearby district schools and on average, after accounting for student population differences, those charter schools spent significantly more per pupil than district schools. Even more striking were the differences in spending within the charter sector, between schools having substantial private contributions versus those receiving far less outside of their public subsidies. [i] In follow up work, in an article published in 2017 in the journal Educational Policy, Mark Weber and I found that for-profit charter operators, on average divert more money from direct classroom services, leading to even greater variation across schools in jurisdictions with a mix of district schools, for-profit and non-profit charter schools. [ii]

In ongoing work, Mark Weber, Ajay Srikanth and I are finding that across large school districts which have sizeable and growing charter sectors, student sorting by demographics is exacerbated and school spending variations increased. That is, expanded chartering seems to be leading to increased inequality across schools within common geographic spaces. Using data from two waves of the Civil Rights Data Collection, we again find that controlling for student characteristics and grade ranges served, New York City charter schools continue to spend far more than district schools serving similar populations (Figure 1). Results are mixed for other settings, but inequities are inequities, in whichever direction they fall.

Figure 1Slide105

Tightening comparability regulations governing within district equity (defined in terms of progressiveness with respect to low income concentrations) while pushing for expanded choice and diversification of operators and governing bodies are entirely incompatible policies. In some states, charter schools are governed by and financed through local district budgets, providing the opportunity for districts to use common formulas for funding district and charter schools. In other states, fully independent charter schools may be authorized to operate within district spaces but outside of their control or financing. Some states like Texas have both.

Expanding the mix of providers and provider types in a common space is more likely to result in increased variations in quality and spending than in convergence toward equity.  Private providers have widely varied access to outside resources, resulting in highly unequal “revenue enhancement.”  The incentive for school operators is to pursue whatever means is necessary to be the preferred school of choice (for the preferred students), not to spend only what is needed to provide equal opportunity to achieve common outcomes.

Expanding choice also means accepting the presence of inefficiently small startups, at least for a period of time.  Continued shifting of students from one sector to another within the same geographic space means accepting simultaneously inequities and inefficiencies associated with growth related costs in one sector, and stranded expenses in another.  For a system to be equitable, policymakers must figure out how to manage these inequities. Thus far, they’ve largely ignored them.

[i] Baker, Bruce D., Ken Libby, and Kathryn Wiley. “Charter School Expansion and Within-District Equity: Confluence or Conflict?.” Education Finance and Policy (2015).

[ii] Weber, Mark, and Bruce Baker. “Do For-Profit Managers Spend Less on Schools and Instruction? A national analysis of charter school staffing expenditures.” Educational Policy (2017): 0895904816681525.