More School Districts Equal Better Education
Residents of some metropolitan areas have great choice among public school districts while others do not. Boston, for example, has 70 school districts within a 30-minute commute. Miami, on the other hand, is almost entirely covered by the Dade County school district.
A recent study suggests that if America wants to know the effects of increasing parental choice through vouchers and tax credits it should first examine this traditional form of parental choice – choice among public school districts.
Parents have historically been able to exercise school choice only by moving into another school district. The more school districts in a metropolitan area, the lower the costs to moving (e.g., job change, longer commutes, etc.) and the greater the competition between public schools. This type of choice, often referred to as “Tiebout choice” after economist Charles Tiebout, substantially raises education productivity, according to a recent study.
Caroline M. Hoxby, an economics professor at Harvard University, conducted the study. Her article, titled “Does Competition among Public Schools Benefit Students and Taxpayers?” was published in the December 2000 issue of the American Economic Review.
Hoxby analyzed the effects of public school choice by looking at 6,523 metropolitan school districts in the United States. By looking at the “market concentration” in each metropolitan area and holding other factors constant, Hoxby was able to isolate the effect that public school choice had on school productivity.
In order to test whether increased public school choice had any effect on school productivity Hoxby used data from two sources: the U.S. Department of Education’s “National Educational Longitudinal Survey,” and the U.S. Department of Labor’s “National Longitudinal Survey of Youth.” She found a modest but statistically significant amount of the variation in American students’ achievement is explained by Tiebout choice.
To put it another way, if all other things were equal, students in areas with extreme Tiebout choice (Boston) would be expected to score one-quarter to one-half of a standard deviation higher on achievement tests than an identical student in an area with no Tiebout choice (Miami). In Ohio, that would translate to an increase of between 2.67 and 5.34 percentage points on the Ohio proficiency tests.[1]
Hoxby also found evidence that increased choice among public school districts leads to lower per-pupil spending. She finds that moving from no public school choice (Miami) to an area with an abundance of public school choice (Boston) is associated with a 7.6 to 10.1 percent decrease in per-pupil spending.
“Undoubtedly, the most striking result is not the positive effect of choice on student achievement or the negative effect of choice on per-pupil spending but the opposite direction of the achievement and spending results,” wrote Hoxby. “An increase in choice among districts lowers per-pupil spending with no loss – in fact, a gain – in student achievement."[2]
Recently, policymakers have discussed school district consolidation as a possible way to cut cots. While such a move might trim the dollars spent on district administrators, Hoxby’s findings make it clear that if we are concerned about getting value for our education spending, the more school districts the better.
Notes
[1] For the 2000-01 school year, the standard deviation on the percentage of students passing all sections of the ninth grade proficiency tests by tenth grade was 10.69. “RC2002 District Data File,” Ohio Department of Education.
[2] Caroline M. Hoxby, “Does Competition among Public Schools Benefit Students and Taxpayers?” American Economic Review 90, no. 5 (December 2000), 1232.
Joshua C. Hall is the director of the Buckeye Institute Center for Education Excellence and a lecturer in economics at Capital University.
