Politics & Policy

Why School Choice Is Failing

It takes more than vouchers to create a successful, productive market in education.

Milwaukee, Wis., is home to the nation’s oldest and largest school-voucher program, the Milwaukee Parental Choice Program. After starting with just over 300 students in 1990, the program enrolled almost 25,000 students last school year. With open-enrollment programs, magnet schools, and a small number of charter schools, Milwaukee is one of the most “choice-rich” environments in America.

What has been the result? On the 2011 NAEP, a test given to a nationally representative sample in every state and to a select group of large districts, Milwaukee eighth-graders scored a 254 in math and 238 in reading. To put those numbers in some context, on those same tests the averages in Chicago were 270 and 253, respectively, and the large-city averages for the whole test were 274 and 255. On the NAEP, 10 points equates approximately to one year of knowledge, meaning that even compared with their peers only in other big cities, Milwaukee students are two grades below average in math and almost two grades below in reading.

For those of us who believe in school choice, these are some disappointing numbers. Does this mean that school choice is the wrong policy or that the market forces that have increased quality and lowered prices in every other sector of human society somehow don’t apply to education? I don’t think so. Rather, “school choice” has done less to create a market than many of its proponents believe.

School-choice policy — frankly, education reform writ large — is fundamentally about creating high-quality seats for students in schools. School choice has only three levers to pull to make that happen. It can:

  1. Fill excess capacity. If a great school has a fourth-grade classroom with 19 students but 25 desks, or has mothballed an old wing that it can reopen, school-choice programs can get kids in there.
  2. Encourage high-quality schools to scale up. If Our Lady of Perpetual Help is thriving, school-choice programs can encourage the school to open Our Lady of Perpetual Help East, West, North, and South.
  3. Create new high-quality schools.

The problem? Current school-choice programs, especially those providing private-school vouchers, are great at No. 1; they’re lousy at No. 2 and No. 3.

For example, 86 percent of schools participating in Louisiana’s state scholarship program are more than ten years old and so were in existence before the voucher program. While almost 40 percent of participating Milwaukee schools have been created after Wisconsin’s program began, annual publication of school testing averages shows that the high performers are almost exclusively the long-existing schools. In both places, the high-quality seats that school choice creates or fills are not coming from market forces driving the creation of better options; rather, they are coming from vouchers that provide funding for students to leave existing low-performing schools for existing higher-performing ones.

This leads to two central problems.

First, it creates a serious upper bound for the reach of school-choice programs and, ultimately, for their ability to affect the American school system.

At their peak in 1959, private schools enrolled only about 12 percent of U.S. school children, around 5.7 million in total.  Even if we were somehow able to reopen all of those schools (private schools now enroll around 5.2 million children, or 9 percent of all students, and are concentrated much more in the suburbs than their 1959 counterparts) that still would not be enough to educate the millions of inner city students trapped in failing schools.  New schools need to be created.

Second, without new creation, there can be no “creative destruction.”

Injecting markets into education simply creates, as Hayek would put it, a “fair playing field” for schools to compete. In functioning markets, new providers are constantly popping up to replace enterprises that are not meeting the needs of consumers. Through that winnowing process we move from hulking black-and-white televisions that cost $269 in 1958 dollars — over $1,700 in 2012 — to flat-screen LCD HDTVs that cost $249 in 2012. We don’t see that with private-school-choice programs. Private schools are closing across the country, but they are not being replaced by better ones. That doesn’t help anyone.

Private-school choice will drive positive change only when it creates high-quality private schools within urban communities. New schools and school models need to be incubated, funding needs to follow students in a way that allows for non-traditional providers to play a role, new pathways into classrooms for private-school teachers and leaders need to be created, and high-quality school models need to be encouraged and supported while they scale up. In short, policymakers, private philanthropy, and school leaders need to get serious about what’s necessary to make the market work.

— Michael Q. McShane is a research fellow in education-policy studies at the American Enterprise Institute. 


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