New Evidence from Philadelphia: Markets Improve Education Outcomes

Via Harvard University Professor Paul Peterson, we get yet another study on school organization and student achievement. Unsurprisingly, we learn that what applies in the rest of the economy also works for schools; specifically, that free-market processes produce more efficient outcomes—higher achievement levels per dollar spent:

When for-profit management of public schools was first proposed in Philadelphia six years ago, many in that city were extremely skeptical, if not aggressively hostile. So the Philadelphia School Reform Commission, the entity responsible for the innovation, gave only the 30 lowest performing schools to for-profit companies, while another 16 were given to nonprofit organizations, including two of the city’s major universities (Temple and the University of Pennsylvania). Others were reorganized by the school district itself.

In effect, a competition was run among the three types of management — for-profit, nonprofit, and government-run. Four years into the race, here are the results: Students at schools managed by for-profit firms were roughly six months ahead in math than would be expected had the schools remained in the hands of the school district. In reading, students in schools managed by for-profit firms were two months further along than they would have been if the schools had been under district control, though that difference was not large enough to give us statistical certainty. Meanwhile the nonprofits — and the school district’s own reorganized schools — did no better than expected.

Our findings are based upon information gleaned from nearly 400,000 student test scores made available to us by the School District of Philadelphia. They gave us the test scores of every tested student for the years 2001 through 2006, allowing us to track student performance at for-profit, nonprofit and low-performing district schools both before and after the management changes took place

The fundamental logic of markets is simple: producers compete to offer the best product at a given price. Consumers choose the product that best fit their needs. Over time, the best producers expand while the worst ones go out of business.

Given the reality of market discipline—if you don’t educate well, no one will attend your (choice) school—it’s no wonder that schools with a profit motive do better at educating students.

Nevertheless, until the greedy and value-destroying Unions and Bureaucracy can be placated or defeated, we’ll never make progress in educating our students.


One response to “New Evidence from Philadelphia: Markets Improve Education Outcomes

  1. Pingback: Converse Chellis: School choice makes financial sense « The Voice for School Choice

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