Even With Less Funding, Charter Schools Still Outrank Public Schools

It should be no surprise that I have much criticism to hurl at the American public school system. For being a developed country, it is a crying shame that our public school system cannot even provide a K-12 education that is comparable to what one can receive in other developed countries. If the adage of "our children are our future" is correct because of the rate of return on human capital investments, then we should absolutely be finding alternatives to the status quo. One such alternative is the idea of a charter school, which is a school that receives government funding but operates independent of the government. Think of it as a private-public partnership for K-12 education. Much like any political issue, you will have your proponents and naysayers. Those on the Left who have an issue with charter schools bemoan further economic disparity, although I would posit that charter schools bring competition to the monopolistic grasp of the public school system and teachers unions, thereby weakening teacher union clout. If I were to have a prima facie issue with charter schools, is that there is still an element of government intervention because the government is still providing the funding with taxpayer dollards. Even so, less government intervention is a deontological improvement, which makes me wonder whether charter schools are an improvement in terms of improved economic and social welfare.

As a starting point, let's go with study from the University of Arkansas (Wolf et al., 2014) that was released back in July. What did they find? Although there were some irregularities in terms of overall performance, on the whole, the average charter school outperforms traditional public schools both in terms of cost effectiveness and return on investment (Wolf et al., p. 6). What makes this study noteworthy is that it is the first national study conducted that measures the productivity of charter schools relative to public schools. This study's noteworthiness is amplified by the fact that charter schools are able to produce better results, even in spite of receiving 28 percent less funding than public schools (ibid, p. 8). The example of charter schools illustrates once again how throwing money at a problem doesn't solve it. This is not to say that funding is not a necessity to provide a quality education (see Figure 2 in Wolf study), but the reality that one can do more with less is nothing short of astounding. Perhaps these improvements are because the charter schools are selecting prime candidates, thereby exacerbating the socio-economic disparities. Per the study, that is not the case since half of the charter schools enroll a lower-income population (p. 33).

This should help add some additional insight, especially since Stanford University's Center for Research on Education Outcomes (CREDO) shows that the average differences are not that large, although the results can quite vary from state to state. If the University of Arkansas study is a more apples-to-apples to comparison than the CREDO study, then we should take the results to heart, especially if charter schools reduce unintended teen pregnancies and incarceration rates (Dobbie and Fryer Jr., 2013), not to mention the unemployment rate (Gan and Zhang, 2013).

There is an increased demand for charter schools, and it's no surprise. Charter schools provide the flexibility and incentive structure to succeed that is nigh impossible to enact in a public school system riddled with bureaucracy and labor rigidities caused by unionism. While the impacts can vary by state and demographics, what we see in the aggregate is that charter schools work not only on a national level (see New York's success), but also in countries like Chile (Elacqua et al., 2011). There are going to be good charter schools and bad charter schools, and the fact that charter schools are in their infancy in comparison to public schools, it should be no surprise that charter schools are getting some of the bugs worked out. Policy reforms such as admissions lotteries (Angrist et al., 2011) will help, but make no mistake: based on the evidence we have, more charter schools will be a better solution to improving K-12 education in this country than throwing more taxpayer dollars at the traditional public school system.