More Evidence on the (Lack of) Impact of School Choice

By Steven D. Levitt
There is no policy economists love more than school choice. Milton Friedman was an early proponent. The idea certainly makes sense: if parents have the ability to choose the best schools for their children, outcomes should improve through both the better matching of kids to specific schools and the resulting competition that would force schools to develop their programs.

The theory sounds great, but evidence confirming it has been hard to find. Julie Cullen and Brian Jacob, my good friends and co-authors, haven’t done school choice proponents any favors with their latest paper (the full version of which can be found here). Using kindergarten lottery outcomes that determine which kids get into the most sought-after schools, they are able to compare the outcomes of those who win the lottery versus those who lose. The students who win the lotteries go to “better” schools and have “better” peers, but they don’t have better outcomes. These results confirm the earlier findings that Julie, Brian, and I obtained when we examined the impact of lotteries on high school outcomes in Chicago.

Why don’t the kids who get access to “better” schools do better? That is a difficult question. Part of the answer is likely that the definition of “better” is based on outputs, like how high the test scores are at the school or what fraction of its students attend good colleges. That sort of metric ignores the fact that “better” schools tend to attract “better” kids. These are kids with strong families and good academic backgrounds. So even if the school is not at all good at adding value, it will still have the best outputs, because it had the best inputs. If the school does not have high value added, there is no reason to expect that a child who transfers there will do better than she did at her previous school. Parents don’t have good information on the inputs to a school, only the outputs, so it is difficult for them to accurately assess value added.

Also, I believe that people tend to systematically overstate the importance of peer effects, plus many parents are not choosing schools based on academics, but based on other criteria like convenience.

In thinking about the broader implications of this research, it is important to bear in mind that the school choice program that Julie and Brian analyze is just one kind of school choice (albeit the most common one), operating within a single public school system. It differs from voucher programs or school choice across school districts, and increased competition may be more effective in those settings.