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Wednesday, July 11, 2007

Andrew Samwick: Public Education Reform in the Presence of Monopolies

Andrew Samwick says my contention that unions aren't the main problem in education is wrong, then goes on to argue that unions aren't the main problem in education. The problem, he says, is lack of choice:

Public Education Reform in the Presence of Monopolies, by Andrew Samwick: Via Ezra Klein and Mark Thoma, I am directed to a very good post by Kevin Carey at The Quick and the Ed on the relevance of teacher's unions to fixing the problems in public schools. I'll first take issue with a theme that emerges in the commentary, expressed by Mark as:

Public schools in higher ranked socio-economic areas do very well, even with unions present, so I don't think unions are the major issue.

The statement is worded so loosely that I can't really falsify it. However, the issue is not whether a union is present but whether the union's presence is a binding constraint on improvements to the educational system. In higher socio-economic areas, there are far fewer underlying challenges to the educational system and thus fewer opportunities for the union's pursuit of its own interests to interfere with addressing those challenges. The appropriate counterfactual to consider is whether the public schools--whether in higher or lower ranked socio-economic areas--would do even better in the absence of unions. The answer can certainly be "yes" if the unions were using their monopoly power to constrain the behavior of other stakeholders in the system.

But the monopoly that's relevant is not primarily the teacher's union, it is the monopoly of the school board over the educational choices of the families in the area (which itself may facilitate the unionization of the labor force). Of the several elements that characterize the public schools in my town:

I do not object to the generally progressive manner in which educational funds are raised within the district. We have a local property tax. In this community, the value of the house is a pretty close analogue of permanent income. (I don't necessarily advocate property tax funding more generally given the disparities across districts, but that's a different matter.)

I do not object to the use of some of those monies to run our highly regarded public schools that my children could attend without additional payments from K-12.

However, I strongly object to the constraint that all of these monies go into just these three schools (covering K-5, 6-8, 9-12). I have no choice of provider if my views of the best educational program for my children are at odds with those of the school board, acting on behalf (hopefully) of the other members of my community. I don't begrudge them their views, but I simply may not share them. I don't see why I should have to forfeit all of the tax monies that would be spent on my children's behalf to put them in private schools.

The money that is allocated to my children's education--not the tax money I pay--should follow the children rather than being constrained to be spent only at the government-run schools. That's the key monopoly problem, whether in high-ranked socio-economic areas like mine where additional expenditures are a desirable luxury good or in more disadvantaged areas where the consigning of low-income students to poorly performing schools is catastrophic. If the money followed the children, then multiple providers would compete, and members of the community could be better served by that diversity.

I may post more on implementation of such a system at a later date.

Unions may, at the margin, affect quality (though there are arguments in both directions on this, there are reasons to believe unions increase quality as well), but I still contend that is not the major problem in poor, inner city schools and other places where there are severe educational problems and challenges. Eliminate unions tomorrow, come back in the future, and if that is the only change, these schools will still be struggling.

But on the school choice issue, I don't think that is the major constraint to school improvement either. We essentially have school choice here. You can send your kids to any public school in the district, though places at a few schools are allocated by lottery if you don't reside in the school's area. Mostly, though, it's wide open. In addition, there are also lots of alternative and immersion schools to choose from and most of those are available to all who apply.

The result of this policy has been the opposite of what you would hope and has generated a huge local controversy. As far as I can tell, the school choice policy has increased rather than decreased inequities. Though disadvantaged students could take advantage of this, they don't for the most part. But that is not true of the more affluent families living in the poorer districts. In many cases they have moved their kids, mostly to the higher socio-economic areas, and when you look ex-post the distribution is even more unequal (as are educational outcomes). Remarkably, this appears to happen even when there is a alternative and traditional school operating in the same buildings as is often the case here. The students at the top of the distribution move to the specialized schools (e.g. the French of Science immersion schools) leaving the others behind. Given the importance of peer effects, this separation further disadvantages some of the students, and there is little evidence of improvement at the poorer schools even when they lose enrollment.

I should note that this is all within the public school system - the best schools here are as good as private schools, so there is little demand for private education given that parents have the opportunity to move kids to these schools if they want (I should add that the quality at the best schools appears to be more from parental involvement rather than from school choice, though choice does concentrate these parents in particular schools).

If we are going to implement choice and allow people to take both their kids and money out of the public schools and move to private schools, I think we need to figure out how to make sure that the kids from disadvantaged households aren't left behind, unable to take advantage because their parent's work schedules and resources do not allow the inconvenience and cost associated with transportation to and from private schools, because there is "parent failure," because there is lack of information on alternatives (and their value), and so on. It's fine to promote school choice, but if the only ones doing the choosing are those with the most advantages to begin with, while it might improve things at the margin for our best and brightest, it will not solve our most important and most challenging educational problems.

Update: For example:

Three of the academy schools - Howard, River Road/El Camino del Rio and César Chávez in southwest Eugene - serve large numbers of Latino students, some of whom are learning English. In recent years, these schools have struggled the most with state test scores and the so-called "achievement gap" that separates students by socioeconomic status, race and ethnicity.

All five schools - the fifth is Adams, in south Eugene - receive federal Title I money, which is meant to enhance reading and math instruction at high-poverty schools. Each school has a poverty rate - gauged by the percentage of students in the free- and reduced-price lunch program - of at least 63 percent.

The academy schools share another characteristic: All lose large numbers of children in their attendance areas to other schools.

That's true with other neighborhood schools, too, and the phenomenon has sparked a sometimes bitter community debate in recent years over the district's system of open school choice and alternative, or magnet, elementary schools. Most of the nine alternative schools, and a few affluent neighborhood schools, enroll disproportionately low numbers of low-income, minority and special education students. The academy schools, meanwhile, serve disproportionately high numbers of students who fit those descriptions.

Russell's recommendations came in response to a report by the Access and Options Committee, which studied the school choice issue. Strengthening neighborhood schools, especially those that are struggling most, was key among the committee's suggestions.

Some staff members and parents at the academy schools had misgivings early on, wondering if being labeled and highlighted as a struggling school would further erode interest among the middle-class families they wish to attract. ...

My kids went to César Chávez for several years, it has one of the lowest socio-economic ratings in the state, and I volunteered inside classrooms there weekly. Do that - spend time in classes with the teachers - and you will find lots of respect for what they do and better understand the challenges they face. When my kids moved from there to one of the higher rated areas, there was plenty of help already including parents hiring music and science teachers on their own through fundraising (which means they donate to themselves) to enhance the school's offerings. I went from being one of the few who would and could help to just another face in the school help crowd.

    Posted by on Wednesday, July 11, 2007 at 01:20 PM in Economics, Market Failure, Policy | Permalink  TrackBack (0)  Comments (48)

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