Graphs of the Day: Texas Private School Enrollments & Expenditures

Below are a series of graphs of the distribution of enrollments and average total expenditures for Texas private schools. I figure these are particularly relevant as the Texas legislature entertains the idea of providing vouchers for private schools in Texas. These data, unfortunately, are from a few years back – based on 2008 IRS tax filings of private schools. Further, because I used IRS filings to determine expenditures, certain groups of schools – most notably Catholic schools – are noticeably underrepresented in the financial analysis. That said, I was able to compile sufficient  data on relatively large numbers of Independent Schools (about 75% of all nationally) and Christian Schools (nearly 1/3… not great, but reasonable numbers). Those two groups of schools represent a significant share of Texas private school enrollments.

Here’s the punchline from these graphs. If we have any expectation that a voucher program is going to provide religious neutrality in access to private schooling or to provide sufficient opportunity to attend high quality non-religious, private independent schools, then voucher levels likely need to be much higher than commonly recommended. This then raises the key policy question – if the vouchers would have to be much higher than the average current public school expenditure – and the outcomes unknown – why would we adopt such a policy?

As the larger study (link) below shows, private schools are not uniformly/systematically “cheaper” and/or “better” than public schools. Rather, they vary widely and there are substantive differences in the programs (class size, etc.) and teacher characteristics in low spending versus high spending private schools.

Further, it is important to consider NOT the TUITION, but the actual per pupil expenditures of schools that are expected to enroll voucher students. Schools will (and can) only absorb so much loss per child, just as they do when setting tuition & financial aid policy while cognizant of their program cost structures. And, as voucher enrollment shares of total enrollments increase, shares of enrollments of families likely (and able) to contribute significantly to annual funds (to offset operating gaps) decreases (a potentially vicious cycle of financial decline).

That out of the way… here are the Texas numbers:

Far more information on the data used here and their policy implications can be found here: http://nepc.colorado.edu/publication/private-schooling-US

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When schools have money…

When schools and school districts have more money and spend more money, what do they spend it on?

We are told these days to believe that everything we thought about the virtues of small class size back in the 1990s was misguided. That improving teacher quality trumps reducing class size any day when it comes to efficiently improving student outcomes. We are told to believe that teacher quality can be improved at nominal cost, whereas achieving similar gains via class size reduction would be absurdly inefficient and very costly. Yet to date, we have little evidence that we can actually achieve the same measured outcome gains achieved by reducing class size in the 1990s by instead improving teacher quality… and that this can easily be done at lower cost. In fact, many go so far as to argue that we can take the same average teacher wage, and instead of paying older teachers more and younger teachers less, we just have to pay better teachers more and worse ones less – and that somehow this will lead to a new interest in teaching among our best and brightest college graduates. I struggle with the reasoning here, and certainly have not seen the evidence.

I am particularly skeptical that dramatically reducing the predictability and stability of career earnings, while not altering dramatically the average level of compensation can result in any positive changes to teacher quality. This is especially true if higher teacher wages are tied to extremely noisy measures of teacher performance – making it difficult for a teacher to even control, no less predict his/her career earnings.

We do know from many older studies that improving wages can improve the teacher workforce:

• Murnane and Olson (1989) find that salaries affect the decision to enter teaching and the duration of the teaching career.[1]
• Figlio (1997, 2002) and Ferguson (1991) find that higher salaries are associated with better qualified teachers[2]
• Loeb and Page (1998, 2000) find that raising teacher wages by ten percent reduces high school dropout rates by between three and six percent and increases college enrollment rates by two percent.[3]

We also know that imposing strict spending limits on public schooling, thereby limiting the ability of public schools to pay competitive salaries can harm teacher quality over time:

• Figlio and Rueben (2001) explain: “Using data from the National Center for Education Statistics we find that tax limits systematically reduce the average quality of education majors, as well as new public school teachers in states that have passed these limits.”[4]

Interest in teacher quality over class size reduction has grown so strong that some are beginning to make the leap that we should simply increase class size to 30 or even 35 students per class in order to pay enough to get really good teachers. After all, who can argue with the logic that a good teacher with 35 kids is better than a crappy one with 20 kids.  Of course, this assumes falsely that every class of 35 would be taught by a better teacher, on average, than those teaching the classes of 20, because every teacher currently teaching the smaller classes is crappy. That said, we do have pretty consistent evidence that salary increases could increase teaching quality.

However, we also have at least some evidence that teacher quality and class size interact.  We may find that we are fighting a losing battle trying to recruit high quality teachers to teach classes of 35 kids even at the higher salary. This may especially be the case in schools and districts where large classes are particularly difficult to manage. Class size is a working condition and more desirable working conditions can reduce the need for paying higher salaries – another trade-off for which we have no good dollar to dollar estimates.

This brings me to my somewhat related data query for the day. When schools have money to spend, what do they spend it on? When looking at high spending suburban school districts, or looking at private independent schools, which I have referred to elsewhere as “luxury” schooling, what are their defining attributes?

Arguably, the defining attributes of luxury schooling simply reflect the demands of luxury schooling consumers – residents of high spending affluent suburban communities and parents who send their children to private independent schools. Go to nearly any private school web site – or web site on “why you should choose a private school,” and you will find one item at the top of the list nearly every time – Small Class Size- or Individual Attention (and alternative angle on what? small class size!). But this is irrational right? Why should affluent suburban consumers or private school parents prefer something that simply drives up the price and with diminishing marginal returns? Whatever the reasons, they do, and arguably lower pupil to teacher ratios and smaller class sizes are a, if not the defining feature of “luxury” schooling.

First, here are the per pupil spending levels in select labor markets, for private schools by type and for public schools in the same labor market.

FIGURE 1 : Per Pupil Spending of Private and Public Schools by Labor Market

Private independent schools in particular, systematically outspend public schools in the same labor market by about 2/1!

And this graph shows the pupil to teacher ratios for public schools, all private schools, private Catholic schools and private independent schools. Private independent schools spend double what public schools spend, and leverage most of that money to provide pupil to teacher ratios that are approximately half those of the public schools (teacher salaries are similar to slightly lower than public school salaries).

FIGURE 2: Pupil to Teacher Ratios of Private and Public Schools

Now, this graph shows the per pupil state and local revenues of public school districts in the NY metropolitan area, by district poverty rates. In New York State, as we show at schoolfundingfairness.org, higher poverty districts have systematically fewer resources than their lower poverty, often very affluent suburban neighbors. This graph validates that pattern.

FIGURE 3: Per pupil Revenues of New York Metro Area Districts (in NY State) by Poverty

Now here are the elementary class sizes by district spending group. Note that as spending per pupil increases, class sizes systematically decrease.

FIGURE 4: Spending and Elementary Class Size

The same pattern holds for middle and secondary class sizes.

FIGURE 5: Spending and Middle/Secondary Class Size

Note that at least some of the smaller class size at the middle/secondary level in the highest spending public school districts is a function of providing a diverse set of specialized elective courses, advanced placement classes, multiple languages and so on. The same is true for private independent schools. These are opportunities that many lower spending and/or higher poverty districts in many states go without.

Yes, consumers of luxury schooling seem to have a pretty strong preference for small classes, despite modern wisdom that class size is clearly second fiddle to teaching quality. Imagine the teacher salaries one could pay by moving pupil to teacher ratios in independent schools from 8/1 up to the public school average of 16/1. Imagine the salaries that could be paid in affluent Westchester County and Long Island school districts by increasing class sizes from 16 or 18 up to 35? (see this post on just how high these salaries already are!)

For some reason these private schools and affluent public school districts – more specifically those who support these schools – exhibit a strong preference for small class size even when given wide latitude to cho0se differently. Perhaps they are on to something?

References

[1] Richard J. Murnane and Randall Olsen (1989) The effects of salaries and opportunity costs on length of state in teaching. Evidence from Michigan. Review of Economics and Statistics 71 (2) 347-352

[2] David N. Figlio (1997) Teacher Salaries and Teacher Quality. Economics Letters 55 267-271. David N. Figlio (2002) Can Public Schools Buy Better-Qualified Teachers?” Industrial and Labor Relations Review 55, 686-699.  Ronald Ferguson (1991) Paying for Public Education: New Evidence on How and Why Money Matters. Harvard Journal on Legislation. 28 (2) 465-498.

[3] Susanna Loeb and Marianne Page (2000) Examining the link between teacher wages and student outcomes: the importance of alternative labor market opportunities and non-pecuniary variation. Review of Economics and Statistics 82, 393-408. Susanna Loeb and Marianne Page (19980 Examining the link between wages and quality in the teacher workforce. Department of Economics, University of California, Davis

[4] David N. Figlio and Kim S. Rueben (2001) Tax limits and the qualifications of new teachers Journal of Public Economics Volume 80, Issue 1, April 2001, Pages 49-71

If money doesn’t matter…

A) Then why do private independent schools, like those attended by our President’s children (Sidwell Friends in DC), or by Davis Guggenheim’s children (?), spend so much more than nearby traditional public schools?

Davis Guggenheim, producer of Waiting for Superman, frequently explains to the media these days that he feels uneasy that he has made a personal choice drive by his neighborhood school each day to bring his children to a private school. Now, I don’t know which private school his children attend, but I would suspect (though I may be wrong) that it is more likely to be an academically elite, private independent school than to be a conservative Christian or urban Catholic school. As I discuss in this previous report, the spending differences and resulting programmatic resources and teacher characteristics by type of private school are striking: http://epicpolicy.org/publication/private-schooling-US

I would see little problem with Guggenheim’s personal anecdote were it not for one of the central arguments of Superman being that money plays little or no role in fixing public education systems. Instead, tough-minded superintendents like Michelle Rhee, or charter schools are the solution – money or not.

Again, I’ll fess up to the fact that I am a former teacher at and big supporter of Private Independent Schools. Here’s the school in New York City where I used to teach www.ecfs.org, and here’s its page on tuition: http://www.ecfs.org/admission/tuition.aspx. It was then, and I suspect still is an outstanding example of what a school can be! But that outstanding-ness comes at a price!

(approximately $36,000 per year for middle school and up)

The problem with the assertion that “money wouldn’t help public schools anyway” is that many of those pitching the argument seem themselves to favor private schools that spend more – A LOT MORE – per child than the public schools they are criticizing as failing (speak nothing of the fact that the public schools are serving a much more diverse student population).

Here are some comparisons pulled from my 2009 study on private school expenditures.

First, here’s the per pupil spending in 2005-06 for a handful of major labor markets that had sufficient numbers of Private Independent Day Schools for calculating the averages. My original sample of IRS Tax filings covered about 75% of all Private Independent Day Schools (NAIS or NIPSA member schools), so these are not “outlier” schools.

FIGURE 1 (This figure is now the figure from my original report: http://epicpolicy.org/publication/private-schooling-US)

And here are the regional averages, adjusted for regional differences in competitive wages, using the NCES Education Comparable Wage Index.

FIGURE 2 (This figure is now the figure from my original report: http://epicpolicy.org/publication/private-schooling-US)

If money doesn’t matter when it comes to school quality, then why not pick one of those private schools that charges only $6,000 in tuition, and spends $8,000 per pupil? Clearly there is some basis for the decision to send a child to a more expensive private school? There is some “utility” placed on the differences in what those schools have to offer? In the complete report above, I discuss (in painful detail) those differences across private schools, but here, I quickly summarize some of the differences between private independent schools and traditional public school districts.

FIGURE 3 (This figure is now the figure from my original report: http://epicpolicy.org/publication/private-schooling-US)

Private independent schools a) spend a lot more per pupil, b) have much lower pupil to teacher ratios and c) have much higher shares of teachers who attended more competitive colleges. These seem like potentially substantive differences to me. And they are differences that come at a cost.

I am by no means criticizing the choice to provide your own child with a more expensive education. That is a rational choice, when more expensive is coupled with substantive, observable differences in what a school offers. I am criticizing the outright hypocritical argument that money wouldn’t/couldn’t possibly help public schools provide opportunities (breadth of high school course offerings, smaller class sizes) more similar to those of elite private independent day schools, when this argument is made by individuals who prefer private schools that spend double what nearby public schools spend.

Sidebar: I suspect there are few if any private independent day schools out there which currently evaluate their teachers based on student test score gains alone. Please let me know if you know of one? And, I should note that the private independent school where I worked in New York City was actually unionized and had a tenure system in place with a probationary period similar to that of public schools and a salary schedule tied to experience.

B) Then why do venture philanthropists continue to throw money at charter schools while throwing stones at traditional public schools?

Charter school backers like Whitney Tilson love to throw stones at public schools while throwing money at charter schools. Here’s one of his presentations:

http://www.tilsonfunds.com/Personal/TheCriticalNeedforGenuineSchoolReform.pptx

On Slide 13, Whitney Tilson opines that increased spending on public education has yielded no return to outcomes over time, and therefore, by extension, increased spending would not and could not help public schools in the future. Tilson is featured prominently in this New York Times article on affluent fund managers in NYC rallying for charter schools: http://www.nytimes.com/2010/05/10/nyregion/10charter.html?pagewanted=all

So, here we have one of many prominent New York City charter school supporters on the one hand arguing that throwing more money at the public school system could not possibly help that system, but on the other hand, providing substantial financial assistance to charter schools (or at least participating in and promoting groups that engage in such activity)?

A New York City Independent Budget Office report suggested that charter schools housed in public school facilities have comparable public subsidy to traditional NYC public schools, but charter schools not housed in public school facilities have to make up about $2,500 (per pupil) in difference. I will show in a future post, however, that student population differences (charters serving lower need populations) largely erase this differential.

Kim Gittleson points out here, that in 2008-08, NYC Charter schools raised an average of $1,654 per pupil through philanthropy. But, some raised as much as $8,000 per pupil. As a result, some charters – those most favored by venture philanthropists – spend on a per pupil basis much more than traditional NYC public schools (including KIPP schools). I will provide much more detail in this point in a future post.

One might argue that the Venture Philanthropists are trying to spend their way to success – To outspend the public schools in order to beat them! After all, it’s the New York Yankee, George Steinbrenner way? (spoken from the perspective of a Red Sox fan, who spent the last several years in Kansas City, supporting the underdog – low payroll – Royals).

But here’s the disconnect – These same Venture Philanthropists – like Tilson, who are committed to spending whatever it takes on charters in order to prove they can succeed, are arguing that public schools a) don’t need and b) could never use effectively any more money. They are trying to argue that charters are doing more with less, when some are doing more with more, others less with less, and some may be doing more with less, and others are actually doing less with more. Shouldn’t traditional public schools be given similar opportunity to do more with more? And don’t give me that … “we’ve already tried that and it didn’t work” claim. I’ll gladly provide the evidence to refute that one, much of which is in the article at the bottom of this post!

C) Then why do affluent – and/or low poverty – suburban school districts continue in many parts of the country to dramatically outspend their poorer urban neighbors?

Last but not least, why do affluent suburban school districts in many states continue to far outspend poor urban ones? If there is no utility to the additional dollar spent and/or no effect produced by that additional dollar then why spend it?

Here is the overall trend, over time in the relationship between community income and state and local revenues per pupil.

When the red line is above the green horizontal line, there exists a positive relationship between district income and state and local revenue. That is, higher income districts have more state and local revenue per pupil. The red line never drops below the green line. This graph, drawn from this article (http://epaa.asu.edu/ojs/article/view/718) shows that state and local revenues per pupil remain positively associated with income across school districts nationally, after controlling for a variety of factors (see article for full detail). Things improved somewhat in the 1990s, but then leveled off.

FIGURE 4 (from: http://epaa.asu.edu/ojs/article/view/718)

Here are the trends for mid-Atlantic states, where some including New York State improved, but remain strongly associated with income. New Jersey is the only state among these where the relationship between income and revenue is disrupted and ultimately reversed.

FIGURE 5 (from: http://epaa.asu.edu/ojs/article/view/718)

Here are the trends for the New England trend, where New Hampshire school district state and local revenues remain strongly tied to income.

FIGURE 6 (from: http://epaa.asu.edu/ojs/article/view/718)

Here are the trends for the Great Lakes are trend, where Illinois remains among the most regressively funded systems in the nation (along with New York).

FIGURE 7 (from: http://epaa.asu.edu/ojs/article/view/718)

Here’s a specific look at state and local revenues per pupil in New York State districts in the NY metropolitan area, with districts organized by U.S. Census Poverty rates.

FIGURE 8

Is there a reason why Westchester County and Long Island school districts choose to spend so much more than New York City on a per pupil basis? What about those North Shore Chicago area districts?

These communities demand higher expenditures per pupil for their schools on a presumption that the marginal dollar does not go entirely to waste – that there is some value, some return for that dollar, perhaps in the richness of supplemental programs offered or the smaller class sizes – much like the differences in private schools seen above.

Finally, I point you to this recently published article in Teachers College Record, where Kevin Welner and I try to set the record straight on the effectiveness of “reforms” involving state school finance systems. They’re not the “reformy” reforms, but school finance reforms are reforms nonetheless.

Baker, B.D., Welner, K. School Finance and Courts: Does Reform Matter, and How Can We Tell? Teachers College Record

http://www.tcrecord.org/content.asp?contentid=16106

DoReformsMatter.Baker.Welner

Private Schools & Public Education Policy in New Jersey

The commission on private schools established by former Governor Corzine has just released its report:

http://nj.gov/governor/news/reports/pdf/20100720_np_schools.pdf

This report is more fun than many recent reports in New Jersey because it actually has some data and citations. Nonetheless, I have at least a few concerns regarding the presentation of the data and implications drawn from it. I was particularly intrigued by the graph on page 7 – which I replicate below:

This graph shows an apparent catastrophic collapse of the private schooling sector in New Jersey… or does it? Look at that the Y (vertical) axis. The range is from 160,000 to 192,000.  Yeah… that makes for a really steep apparent drop off. Note also that this data is from a state department of education source and is not reconciled against any other source. So, a stretched Y axis to make it look really, really, really dramatic. No second look – second opinion. And, only a single aggregate count of private school kids to show a major across-the-board collapse.

Here’s a more detailed exploration, using two data sources: 1) The National Center for Education Statistics Private School Universe Survey and 2) the U.S. Census Bureau American Community Survey, via the Integrated Public Use Microdata System.

First, here are the number of private schools by type in New Jersey over time:

This graph shows that the only significant decline in numbers of schools occurs for Catholic Parochial schools. Other private school types hold their ground in total numbers of schools.

Next, here are the enrollment and in the second graph, enrollment adjusted for missing data.

As with numbers of schools, the most substantive decline is for Catholic Parochial schools. There is a smaller drop for Catholic Diocesan schools. Other schools stay relatively constant, with some reclassification occurring between Other Religious – Not Affiliated and Other Affiliated. Note that the corrected, weighted version in the second graph above shows a somewhat smaller decline in Catholic Parochial enrollment than the un-adjusted version.

Next, I address private school enrollment by grade level and as a share of the total population of students in public and private school. A drop in private school enrollment would only be significant if it occurred in a context of stable or growing overall student population.

Here’s the total school population by grade level:

And the private school population by grade level:

What we see in this second graph is that the Grades 1 to 4 population appears to be declining most.

Here’s the private school enrollment by grade level as a percent of total enrollment. Kindergarten private school enrollment as a share of kindergarten students has declined. But, other grade level private school populations have declined only very slightly as a share of all children statewide in the same grade level.

This much more refined picture, across two additional data sets casts some doubt on the significance of the first graph above. Is there really a massive collapse of private schooling in New Jersey? It doesn’t look that way to me.

Explanations and Policy Implications for Catholic Schooling in New Jersey

Indeed, there may be some cause for concern for Catholic Parochial schools which appear to be closing and losing enrollment. But this phenomenon is not unique to New Jersey. Others have attempted to shed light on why Catholic schools are struggling in many urban centers.  Catholic schools have tried to remain accessible to the middle class by holding tuition down. At the same time, costs have risen. Decades ago, Catholic schools relied heavily on unpaid, church affiliated staff. Now, nearly all staff are salaried. My own recent analysis suggest that the cost of operating many Catholic schools are quite similar to those for traditional public school districts. The gap between tuition and cost has grown substantially over time for these schools. That’s not sustainable.

Two recent reports provide additional insights regarding public policy forces that may be compromising the stability of Catholic schooling in particular:

1) This Pew Trust report on parental choices in Philadelphia suggests that the expansion of Charter schools has potentially cut into the non-Catholic enrollment in urban Catholic schools.

http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Philadelphia_Research_Initiative/PRI_education_report.pdf

Notably, New Jersey has not expanded charter schools as quickly as other states. But, it remains possible that existing New Jersey charter schools have drawn some students away from urban Catholic schools. As such, if the state is truly concerned with the sustainability of Catholic schools, the state should evaluate the effect of charter expansion on Catholic school enrollment (and on teacher recruitment/retention).

2) This Thomas B. Fordham Institute report suggests that vouchers in other locations such as Milwaukee have been a double-edged sword for Catholic schools. Vouchers do not provide full cost subsidy and restrict charging tuition above the subsidy to cover the gap. As such, schools are required to take a loss for each voucher student accepted. Further, as Catholic schools take on more non-Catholic vouchered students, parishioner contributions tend to decline – because it is perceived that the Catholic mission of the school has been compromised.

http://www.edexcellence.net/doc/catholic_schools_08.pdf

This situation does not apply in New Jersey, but findings from other cities raise concern that an under-subsidized voucher or tuition tax credit like the proposed Opportunity Scholarship Act (NJOSA) could actually do more harm than good for many private schools.

Vouchers differ from other subsidies (like the transportation and textbook subsidies) because of the restriction on charging tuition to cover the margin between the subsidy level and actual cost.  Some schools may subvert this requirement with strongly implied requirements for “tithing” as a substitute for tuition – including voucher receiving families. In fact, families could be obligated to tithe sufficient income to the private schools (or the religious institution that governs those schools) such that the family then qualifies for the tax credit program. The state should attempt to guard against this possibility in the design of any related policy.

Follow-up information:

A reader was kind enough to send me this link: http://www.avi-chai.org/census.pdf

Page 23 of this census report on Jewish school enrollment explains:

The other side of the geographic distribution picture is the concentration of schools in New York and New Jersey, as well as the overwhelming Orthodox domination in these two states. New York has 132,500 students, up from 104,000 ten years ago, while New Jersey has nearly 29,000 students, up from 18,000 in 1998. New Jersey’s gain is nearly all attributable to Lakewood, although there has been meaningful growth in Bergen County and the Passaic area. At the same time, Solomon Schechter enrollment in New Jersey has declined precipitously.

Clearly, the Orthodox schools in New Jersey are not in a free fall, as implied by the aggregation of all private schools in the private school commission report.

Another reader sent me this link:  http://www.njpsa.org/userfiles/File/EO161.pdf

This link explains the charge of the commission. It would seem to me that the final report has strayed somewhat from this charge.

Another “You Cannot be Serious!” The demise of private sector preschool in New Jersey?

There is little I find more enjoyable than boldly stated claims where the claims are entirely unsubstantiated… but where data are relatively accessible for testing those claims.

This week, the Governor’s Task Force on Privatization in New Jersey released their final report on the virtues of privatization for specific services. I took particular interest in the claims made about preschool in New Jersey. Preschool programs were expanded significantly with public support for both public and private programs for 3 and 4 year olds following the 1998 NJ Supreme Court ruling in Abbott v. Burke. For more information on the rulings and Abbott pre-school programs, see: http://www.edlawcenter.org/ELCPublic/AbbottPreschool/AbbottPreschoolProgram.htm

Here are the claims made in the privatization report:

•At the program’s inception, nearly 100 percent of students were served by providers in the private sector, many of which are women‐and minority‐owned businesses. Now, approximately 60 percent are served by private providers, as traditional districts have built preschools at great public expense and unfairly regulated their private‐sector competitors out of business.

•There are currently two sets of state regulations governing pre‐k. The majority of private pre‐k providers are subject to Dept. of Children and Families (DCF) regulations, but private pre‐k providers working in the former Abbott districts and serving low‐income children in some other districts are subject to the regulation of the DOE and the respective districts themselves, effectively crowding out the private sector and driving up costs to the taxpayer without any documented benefit to the children they serve.

http://www.nj.gov/governor/news/reports/pdf/70910_NJ_Privatization_Task_Force_Final_Report_(May_2010).pdf

To summarize, the over-subsidized public option of Abbott preschool has decimated the private preschool market in New Jersey, adding numerous women and minority business owners to the unemployment roles since the program was implemented (okay… a bit extreme… but I suspect you’ll hear it spun this way… since the above language isn’t far off from this).

The last time I read something this silly was in a research report from The Reason Foundation regarding “weighted student funding.” Not surprisingly, the Reason Foundation is among the only sources cited for… anything… in this report on the virtues of privatization (see page 4).

In this post, I’ll address two issues:

First, I address whether the claim that private preschool enrollment has dropped is true. Has private preschool in New Jersey actually been decimated since the 1998 Abbott decision? Are there that many fewer slots in private versus public preschools than before that time? Have public programs continued to grow while private programs have been eliminated? Has private preschool enrollment declined at any greater rate than private school enrollment generally? if at all?

Second, I revisit some of my previous findings about private versus public school markets, cost and quality. The recommendation that follows from the above claims is that the state, instead of continuing to subsidize expensive Abbott preschool programs, should allow any private provider to participate without Abbott regulation. This, it is assumed, would dramatically reduce costs. Rather, this might reduce expenditures… and the quality of service along with it. Lower spending (not cost) private providers simply don’t and can’t offer what higher spending providers do. Cost assumes specific quality, and lower “cost” assumes that less can be spent for the same quality. In this case, quality is being ignored entirely (or assumed entirely unimportant). That is, the proposed plan of allowing any private provider to house “preschool” students would likely be the equivalent of subsidized “daycare” (minimally compliant with Dept. of Children and Families (DCF) regulations) and not actual “pre-school.”

Issue 1

For these first four figures, I use data from the U.S.Census Bureau’s Integrated Public Use Microdata System. One of my favorites. Specifically, I evaluate the school enrollment patterns of 3 and 4 year olds in New Jersey from 1990 to 2008, by school type. Note that Census IPUMS data are actually not great for evaluating parent responses to the “school” enrollment question for 3 and 4 year olds, because in many cases a parent will identify their child as being in “school” even if the child is merely in daycare… home based, non-instructional, or any type of daycare. This is not hugely problematic here, because the report on privatization assumes that home based daycare or anything registered with DCF to supervise children during the day qualifies as a pre-school.  If anything, there may be under-reporting of private enrollment in these data by parents who actually don’t consider their private daycare to be “school.”

For 3 year olds, from 1990 to 2000, both public and private enrollment increase, while non-enrollment decreases. Public and private enrollment then stay relatively steady, except for an apparent increase in private enrollment in 2008 (I’m not confident in this bump, having seen other odd jumps between 2007 and 2008 IPUMS data). In any case, it would not appear that public enrollment has continued to severely squeeze out the private market place, unless we were to assume that the private market would have absorbed the entirety of the reduction in non-enrollment.  The lack of substantive shift from 2000 to 2008, with privates if anything, increasing their share, suggests that public subsidized have not led to the collapse of the private preschool market.

The next two figures show the enrollment patterns for 4 year olds. In general, 4 year olds are more likely to be enrolled in school, public or private, and less likely to be non-enrolled. As with 3 year olds, there really aren’t any substantive changes to the relative enrollment of 4 year olds in public and private settings between 2000 and 2008. No collapse of the private market here.

As an alternative, I explore the enrollment of private schools which provide pre-kindergarten programs statewide, using the National Center for Education Statistics Private School Universe Survey. Using this data set, we can determine whether the number of enrollment slots at the preschool level among private providers has declined, and whether the decline in private preschool enrollment has been greater than the decline in private school enrollment more generally.  Note that much has been made of the “collapse” of private schooling in New Jersey in the context of the New Jersey Opportunity Scholarship Act.

This figure shows that private school enrollment generally has declined more than private preschool enrollment since 2000. Private preschool enrollment has remained relatively stagnant statewide from 2002 to 2008. No real collapse of private preschools evident here.

Issue 2

As I noted above, preschool might be defined in many different ways. On the one hand, we might wish to consider preschool to be any place that meets minimum health and safety guidelines for caring for children between the ages of 3 and 4. To me, that sounds more like daycare. Alternatively, preschool might actually involve specific curriculum and activities as well as training for personnel, etc. Obviously, these differences in definition can and likely do significantly influence the cost per child of offering the service. If I can hire high school graduates and rely heavily in parent volunteers, and use only minimally compliant physical space to supervise children at play – mix in story time – I can likely do things relatively cheaply. On the other hand, if I actually have to hire teachers who hold college degrees and provide a specific curriculum and have appropriate physical spaces in which to do those things, it’s likely going to get more expensive – publicly or privately provided. It’s not so much about whether it’s publicly or privately provided, but whether there are minimum expectations for what defines “preschool.”

The elementary and secondary private school market is highly stratified by price and quality, as I have discussed on many previous occasions. YOU GET WHAT YOU PAY FOR. Yeah… I know that clashes with the appealing logic that private providers always do more with less…. thwarting the “you get what you pay for” assumption… or even reversing it… ‘cuz private provides do so much more with so much less. But let’s look again at one of my favorite summaries – with a new presentation – of the private school market. Here’s the earlier version.

This figure lines up the national average (regionally cost adjusted for each regional cluster) a) per pupil spending, b) pupil to teacher ratios and c) percentage of teachers who attended competitive undergraduate colleges, for private schools by private school type. Public school expenditures sit right near the middle. The small group of Catholic schools in the national sample sit right along side public schools (the system of Catholic schools has evolved to look much like their public school counterparts over time).  Independent schools spend nearly twice what public schools spend, have much smaller class sizes and have very high percentages of teachers who attended competitive undergraduate colleges. Hebrew and Jewish day schools lie about half way between the elite privates and public and Catholic schools. At the other end of the private school market are conservative christian schools, which spend much less per pupil than public or Catholic schools. They do have somewhat smaller class sizes, but have very poorly paid teachers, and have few if any teachers who attended competitive colleges. For more on these comparisons, see: https://schoolfinance101.wordpress.com/2010/02/20/stossel-coulson-misinformation-on-private-vs-public-school-costs/. In short, this figure shows that even in the k-12 marketplace, private providers are very diverse, some offering small class sizes and highly qualified teachers for a much higher price than public schools, and others offering much less.

We can certainly expect at least as much variation in the private preschool marketplace, if not one-heck-of-a-lot more, since many private daycare facilities require little or no formal training and no college degree for their employees.

As an aside, I was driving down Route 202 the other day west of Somerville Circle and noticed that they are putting in a Creme-de-la-Creme “daycare/preschool.”  We had one around the corner from our house in Leawood, KS.  I suspect that few of the Abbott preschool facilities built at such great expense compare favorably to a “Creme” facility – with waterpark (we’re talking slides, fountains), mini tennis court, indoor fish pond, tv studio, etc. (at least that’s what the one in Leawood had. I expect nothing less here?).  I expect that many parents, having toured many other “less desirable” daycare and preschools, will decide that their child deserves the “Creme” lifestyle (I suspect that there are actually other options with better curriculum and perhaps better teachers in the area, but I have not had the occasion to research it). It’s just an extreme example of the diversity of the private preschool marketplace. I suspect the cost per pupil will far exceed that of the Abbott preschools (heck… it already exceeded $12k per year in Kansas several years ago).

To summarize, the Task Force report on privatization makes bold claims about Abbott preschool programs crowding out, and decimating private preschool programs, many run by women and minority business owners. But the Task Force report does not bother to substantiate a) that private preschools have actually suffered, or b) that any, if they had suffered, were actually owned and operated by women or minorities. The only “evidence” the report has to offer is the undocumented claim that 100% of kids were in private programs and now only 60% are. Where does that come from? What the heck is that? 100% of who? 60% of what?

Further, the Task Force report is willing to assume that warehousing 3 and 4 year olds under the supervision of high school graduates in physical spaces and with supervision ratios compliant with DCF regulations is sufficient for low-income and minority children… or rather… that it is the lower cost option with equivalent quality to Abbott pre-school programs (public or publicly regulated private). It is critically important that we acknowledge the difference in the quality or even type of service received at different price points. Like the private K-12 market, the private preschool market varies widely, and spending much less generally means getting much less.

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See also, the Abbott 5th year report: http://edlawcenter.org/ELCPublic/Publications/PDF/PreschoolFifthYearReport.pdf

Manual for Child Care Centers from DCF in NJ: http://www.nj.gov/dcf/divisions/licensing/CCCmanual.pdf

Can’t forget this:

NJ Opportunity Scholarship: Must Read Items

Very little time today. Big deadlines and lots of data to analyze. Since the debate is now heating up over the NJ Opportunity Scholarship Program, I thought I’d put out there a few items which really should be part of the debate on this topic.

1) The April 2010 report on the long run effectiveness of the Milwaukee Voucher Program: http://www.uark.edu/ua/der/SCDP/Milwaukee_Eval/Report_15.pdf This report concludes:

The primary finding in all these comparisons is that, in general, there are few statistically significant differences between levels of MPCP and MPS student achievement growth in either math or reading two years after they were carefully matched to each other. In one of the ways of estimating these results, focusing only on those students who have remained in the public or private sector for all three years, private, voucher students are slightly behind MPS students in mathematics achievement growth.

2) My Summer 2009 report on the “cost” and supply of private schooling: http://epicpolicy.org/files/PB-Baker-PvtFinance.pdf It is important to understand that my point in this report was NOT that private schools are either more or less expensive than public schools in the same labor market. They are simply more varied. They are more varied in what they spend, what they provide and what they can achieve. With private schools, you get what you pay for.

I write about the specifics of the New Jersey context here: https://schoolfinance101.wordpress.com/2010/03/23/would-8000-scholarships-help-sustain-nj-private-schools/, pointing out that claims that average private school costs in NJ are $6,000 (elem) and $9,000 (secondary) are entirely unfounded.

Here, I provide a quick snapshot of cost/quality issues in private schooling in response to other recent media reports: https://schoolfinance101.wordpress.com/2010/02/20/stossel-coulson-misinformation-on-private-vs-public-school-costs/

The premise that children will be saved from failing public schools with these paltry payoffs to low-end private schools is a stretch at best. Good private schools are expensive, and often more expensive than even the highest spending nearby public schools. The Milwaukee studies provide useful insights as well, showing little or no effect after much more than a trial period.

Would $8,000 Scholarships help Sustain NJ Private Schools?

Note: This was written prior to the announcement that the scholarship amounts would be $6000 for elementary and $9000 for secondary schools. The same logic and findings apply, though to an even greater extreme in light of these numbers.

Part of the argument being made for providing $8,000 scholarships for students to attend private schools in New Jersey is that those scholarships would help financially sustain struggling New Jersey private schools. I published an extensive report on private school costs last summer, here: http://epicpolicy.org/publication/private-schooling-US

In this report, one issue I address is the fiscal problems of urban Catholic schools which have struggled to survive on shoestring budgets. The reality is that most operate with a very large differential between tuition charged and actual operating costs. In 2007-08, average tuition charged by Catholic Parochial and Catholic Diocesan schools in New Jersey was about $4,000 and $5,000 respectively at the elementary level, and about $9,000 at the secondary level (based on the very limited sample in the Schools and Staffing Survey of 2007-08, National Center for Education Statistics). Private non-religious school tuition was about $11,000 at the elementary level and $18,000 at the secondary level. the weighted average tuition across all school types for New Jersey private schools was $10,206. So, even keeping this figure in mind… if tuition held constant from 2007-08 to 2010-11, the $8,000 scholarship would fall $2,000 short of average tuition… not even average cost.  Clearly, private schools on average would be taking a loss to accept these scholarships, unless only the lowest spending private schools accepted the scholarships or unless the scholarships were to stimulate massive additional philanthropy outside of the tax credit program.

But again, these above tuition estimates are based on relatively small numbers of schools and the schools from these national surveys cannot be listed individually because of confidentiality issues.

Most importantly those tuition figures don’t represent actual total costs of operating and maintaining these schools. All rely on some form of philanthropy and/or church subsidy to cover full costs. Below is a summary graph of IRS Tax Filing data on New Jersey private schools (2007 tax year).  Schools that most consistently report their financial data (by obligation) are those which are not officially religiously affiliated (specific church), but some religious schools do. The graph below includes  Total Expenditures per enrolled pupil, where Total Expenditures are from the IRS 990 (and include all expenditures including those for capital in the given tax year and other contracted services) and enrollment data are from the National Center for Education Statistics Private School Universe Survey.

Notably absent in the graph below, but included in the tuition averages above are Catholic schools, which represent approximately 67% (seems to vary by year of data) of students in private schools in New Jersey.

Most schools represented by the averages below would need to take a substantial loss for each child accepted on the $8,000 scholarship (in 2007).  There are no doubt interesting quirks (large capital expenditures for some?) and omissions (suspiciously low expenditures for others) in these individual school reported data, but they are illustrative nonetheless. Boarding schools are excluded.

An important feature here is that the only schools that would not operate at a loss on the proposed voucher level are religious schools. That is, we should expect that at this voucher level, the vast majority if not all students using the voucher would have to use it at private religious schools unless private non-religious schools were able to find substantial additional resources to offset large per pupil losses (cost – voucher differences).

In general, an $8,000 voucher would likely do little to help sustain fiscally stressed private schools in New Jersey because the voucher does not cover operating costs.

Providing these vouchers might (would likely) increase private school enrollment, making certain private schools more accessible to low-income families. And, some students may benefit from this (while others may not). But, such a program will likely do little to cure the fiscal woes of cash strapped private schools. In fact, some have argued specifically in reference to Catholic schools that parishioner philanthropy to the schools may decline as those schools take on more non-Catholic students through vouchers, causing the school’s mission to drift.

In a related recent post, I point out that in general, when it comes to these large differences in spending by private school sector, you get what you pay for: https://schoolfinance101.wordpress.com/2010/02/20/stossel-coulson-misinformation-on-private-vs-public-school-costs/

From previous post:

• Private independent day schools which provide small class sizes with highly academically qualified teachers spend well above nearby public schools.
• Catholic schools, where they report their finances (not the crude survey summary data of tuition and expense compiled annually by the National Catholic Education Association) spend marginally less than nearby public schools (but charge much lower tuition than cost), perform about the same if given the same kids and have comparably qualified teachers in terms of academic preparation. Note that Catholic schools in trying to operate on a shoestring have been financially failing at an alarming rate. That is how markets work when you try to hard to price your product below the cost of maintaining quality (a more friendly spin being that the social service mission of urban Catholic schools has outpaced church philanthropy). I discuss this extensively in the report.
• Conservative Christian schools (to the extent they can be lumped together) operate at much less per pupil than traditional public schools and have lower outcomes given the same students and have disturbingly academically weak teaching staff based on national survey data.

Note: According to: http://www.njsendems.com/release.asp?rid=3254

The proposed voucher amount is to be $6,000 (elem) to $9,000 (secondary). The link above claims:

The $6,000 to $9,000 amount is the current average cost per student at non-public schools…

This statement is completely absurd… and quite simply FLAT OUT WRONG! According to what source? Does actual data matter at all here? Wow! Even Cato, which grossly underestimates private school costs estimates the NYC metro average at $10,500 for 2009 (see first section of this post, Cato link).

Mean per Pupil Spending by Private School Type

Distribution of Private School Students in New Jersey

Distribution of per Pupil Expenditures by Private School Type

Stossel & Coulson Misinformation on Private vs. Public School “Costs”

Last summer, I had an interesting exchange with Andrew Coulson regarding the issue of private school costs. That discussion can be found here: https://schoolfinance101.wordpress.com/category/private-school-costs/

I had the displeasure this evening, while channel surfing, to catch a few minutes of John Stossel’s latest episode on the failures of the public education system and low-cost wonders of private education markets.  Here’s a link that summarizes some of the content of Stossel’s latest: http://www.washingtonexaminer.com/opinion/columns/John-Stossel–84692012.html

I happen to be a strong supporter and admirer of private schools, having worked as a middle school science teacher for years in one of NYC’s elite private independent day schools. In my ideal world, I would provide every child the opportunity to attend such a school. And that would be an expensive proposition!

I’ve realized over time, having studied teacher characteristics and finances of various types of private and public schools, that what you get on the private marketplace for education is simply a wider range than what you get in the more regulated public system. That just makes sense. Less regulation broadens the range of options – at both ends.

Private schools do not, by any stretch of the imagination, spend uniformly less than public schools per child. In fact, private independent day schools (a non-trivial segment of the private school marketplace) typically spend much more per pupil than public school districts operating in the same labor market. The school in NYC where I used to work continues to charge in tuition alone, nearly double the average expenditure (operating expense per pupil) of NYC public schools. Further, it is especially important to understand that private school tuition covers only a portion of actual cost.

How can this happen on the open marketplace for education? Shouldn’t market competition  drive these prices into line – bring them down well below public bureaucracy spending on education – and still yield better quality? Or, perhaps the tuition these schools charge and amount they spend to operate actually represent the competitive price of providing the excellent education many parents demand. Perhaps better quality (hard to compare), but at a higher, not lower cost!

Quite simply, when it comes to public or private education, you get what you pay for. Many private schools spend far more than the public schools in the same labor market – many spend roughly the same and some do spend less. And the quality of that schooling varies accordingly. I document this thoroughly in this lengthy report: http://www.greatlakescenter.org/docs/Policy_Briefs/Baker_PvtFinance.pdf

Here are a few highlight figures from the report:

Finally, and perhaps most interesting:

The punchline here is, as I’ve said above – You get what you pay for.  And on the private marketplace for education, high quality comes at high cost – much higher than the average public school cost.

• Private independent day schools which provide small class sizes with highly academically qualified teachers spend well above nearby public schools.
• Catholic schools, where they report their finances (not the crude survey summary data of tuition and expense compiled annually by the National Catholic Education Association) spend marginally less than nearby public schools (but charge much lower tuition than cost), perform about the same if given the same kids and have comparably qualified teachers in terms of academic preparation. Note that Catholic schools in trying to operate on a shoestring have been financially failing at an alarming rate. That is how markets work when you try to hard to price your product below the cost of maintaining quality (a more friendly spin being that the social service mission of urban Catholic schools has outpaced church philanthropy). I discuss this extensively in the report.
• Conservative Christian schools (to the extent they can be lumped together) operate at much less per pupil than traditional public schools and have lower outcomes given the same students and have disturbingly academically weak teaching staff based on national survey data.

Again, you get what you pay for. The open market place for private schooling is simply more diverse than the more regulated public marketplace, on price to consumers, average overall spending and ultimately on quality.

It is entirely inappropriate to argue that the public would be better served by wholesale shifting of current public school students into only those private schools which presently do spend less than the public schools.  It is particularly twisted to suggest that for the price of Conservative Christian or Catholic education, we can provide kids with the equivalent of private independent school education. While pundits like Stossel or Coulson may not make this claim in this particular form, they imply as much by lumping all of these schools together as “private” and proclaiming that “private schools simply do more with less.” The reality – Some do more with more. Some do less with less. And yes, there are exceptions that do more with less, and less with more – just as in any analysis which involves thousands of points.

Coulson’s selective reading skills…again!

So… I’m browsing the Cato web site and Andrew Coulson’s blog entries this morning and find  post where Coulson explains that a 2008 study shows that spending more on K-12 education reduces economic growth (9-2-09 post).

http://www.cato-at-liberty.org/2009/09/02/fretting-about-college-costs-dont-forget-k-12/

So, I look at the study. Here are the first two sentences of the conclusion section of that study:

“Overall, our findings indicate that the three most consistent predictors of income growth are expenditures on higher education, highway expenditures, and K12 pupil–teacher ratios. They consequently contribute to the debate over the effects of class size, by supporting the body of research asserting that smaller classes make a positive difference (e.g., Burr 2001; Glass and Smith 1978; McGiverin et al. 1989).”

http://www.springerlink.com/content/26p7q52122326523/fulltext.pdf

Is there a reason why this wasn’t cited? It’s the main conclusion of the study? Does Coulson expect his readers not to actually make the effort to … read the study? and it’s findings? Even a lazy jump to the conclusions (all I could muster this morning) casts a very different light on the study than Coulson’s one liner: “State-run schooling has become so profligate and inefficient, in fact, that one recent study finds higher public school spending is associated with LOWER subsequent economic growth.”

Note that class sizes are perhaps the most significant driver of K-12 education expenditures.Yes, the same study does show a negative relationship between the education spending measure and economic growth, but in a model which also includes the pupil to teacher ratio measure – which makes interpreting the spending measure somewhat trickier. That is higher spending – at constant pupil to teacher ratio (which strongly affects spending) – is associated with lower growth. This is certainly not the same as a bold conclusion that spending more on K-12 education lowers growth.

Coulson still clueless

In his most recent response to my response:

http://www.cato-at-liberty.org/2009/09/01/author-of-the-private-school-spending-study-responds/

Coulson continues to miss the entire point of my report and misunderstand methodological detail. First, Coulson assumes that the entire point of the report is to show that private schools spend a lot and that they spend more than public schools. The point is that some do and some don’t. The report is about the variation and factors associated with that variation.

Coulson continues to obsess over the potential bias in the sample of religious schools in particular noting that those attempting to maximize revenue are more likely to file their tax returns and make them public in a timely manner through sources such as Guidestar. Perhaps. But, what I have shown of those schools – the largest group reporting being Christian Association Schools – is that they spend very little. I have triangulated this aggregate spending data with data on class size and teacher salaries (from other sources) to show the relationship among these factors. CAS schools spend very little, have low teacher salaries and teachers with relatively weak academic backgrounds. If this is a select group of upward bias spending CAS schools, I find that somewhat depressing. But it is possible. In any case, it does not compromise the findings or policy conclusions of the report. Note that on certain key characteristics that drive spending, the schools in the IRS 990 sample were comparable to all CAS schools in the NCES Private School Universe. That is the purpose of comparing the class sizes between the two. Again, the CAS schools reporting IRS 990 represented nearly 30% of student enrollment in CAS schools based on the NCES PSU survey (which really isn’t a universe. there are missing schools).

The front end of the report (pages 15 to 23) spends a great deal of time pointing out the distribution of children in private schools by affiliation. I included this front end specifically because I wanted the reader to know what I was and was not able to address in relation to private schooling generally. The report is very clear that Catholic schools are noticeably absent in financial filings despite their enrollment dominance in some regions. Perhaps some financial accountability is in order for these schools if we expect them to play such a strong role in serving the public good. However, in some regions, Catholic schools on average take a back seat to CAS schools and Independent Schools combined, both of which are relatively well represented in the analysis. This is true in the South. See figure 8, page 23. Private Independent schools do include some very elite schools (though I’ve excluded boarding schools from the analysis) but are a more diverse group and larger sector of schools than Coulson acknowledges. And, I was able to compile IRS filings for Independent Schools serving about 75% of the total Independent School population in the states and labor markets in the analysis.