When people talk about a crisis in public education, what do you
think the concern really is? Is it with our colleges and universities, or are
we talking kindergarten through 12th grade?
Hoxby is Associate Professor of Economics at Harvard University and has
conducted research examining the value of competition to public schools.
First of all, I don't think the crisis has very much to do with higher
education, at all. I think most people feel pretty happy about the higher
education system in the United States. People are really talking about K
through 12 education. And when we talk about the crisis, I think it's
important to talk about what the crisis is. We don't have an achievement
crisis in the United States. We have achievement that is, perhaps a little bit
better, maybe about the same, perhaps a little bit worse, than it was in 1970.
So there's no "crisis" in the sense that achievement has been deteriorating.
However, we want out students to have the best education in the world. And a
lot of countries have improved their education a lot since 1970, whereas we
stayed about the same, maybe a little bit better. And I think, increasingly,
we're feeling mediocre in the world of industrialized nations. We're not doing
the worst, in terms of math and science and reading and writing, but we're
certainly not doing the best amongst other nations with similar industrial
So I think that's one of the worries. The other worry is that we've been
spending a lot more on education since 1970. Education spending has gone up by
about 85% in real dollars since 1970. So, I think that the spending has been
going up because people want to have education that's getting a lot better over
time, and having it stay about the same or getting a little bit better is not
making people happy.
Now, you're an economist and, in general, to over-simplify, your theory is
that competition within schools, between public schools and between different
types of schools and public schools, improves schools over all. Is that,
generally, your view?
I think that school choice or competition among schools has three major
effects, or could have three major effects. One of them is what you just
mentioned. It's an improvement in the efficiency of schools, and that really
means that you get more achievement for the same dollar, or that if you spend
more dollars, you're definitely going to get a big improvement in achievement
for it. So that's one potential effect, and I think that's the one that we
like to focus on the most because it's what we need the most. I think the
second potential effect is that you could get schools that are more innovative
or that are better matched to students' needs. And, again, that's somewhat
similar to what we might see in the private sector, or you might see a company
start-up that really serves consumers who have a certain niche demand. So
that's the second potential effect. And the third potential effect is that it
could change the way that students are sorted among schools, and that's
something that we think a lot about, too, when we deal with school reform.
What do you mean by that? In terms of racial integration or other
Racial integration is, perhaps, the most obvious example....Let's say we're a
state and we're starting a charter school system. And we want to get the
benefits of school choice, so we want to get more efficiency. We want to get
better achievement for our dollars. We want to have some innovation. We want
to have students who are better matched to schools, but we don't want racial
integration to get worse.
What we need to do when we write the school policy is to say, "Look, a charter
school that manages to achieve the same degree of racial integration as, say,
the district around it, is going to get the top number of dollars that a
charter school can get on a per-pupil basis." That might be, say, $6,000 in a
state and, if it diverges a little bit from the racial integration of the
district around it, it gets a little less money. If it diverges a lot, it gets
even less money per pupil. Now, if you think about it, you could get to
the point where you say, "Look. Here's a school that's all white or all black
or all Hispanic or all Asian-American." It doesn't get anything per pupil. So
it doesn't exist.
I think the nice thing about having a policy where that's written in at the
beginning is that everyone has an incentive to pay attention to what we would
consider to be social goals, like racial integration--not just black parents,
not just white parents, not just Hispanic parents--everyone has that in mind.
Everyone has an incentive to send their kids to a school that's more
One of the other fears [of opponants to vouchers]--and, as an economist, you
might be able to address this--is that in a voucher program, you're taking away
financial resources from a failing public school, transferring them to the
private sector and leaving the public school in even worse shape. What do you
say to that?
That's a strange argument, in a way. Let me just go through the logic.
Typical per pupil spending in the United States is about $7,500 a year. That's
average per pupil spending in public schools in the United States. And, the
typical voucher in the United States is under $2000 a year. So, let's just say
that we had a public school system and a voucher program came into place, and
it was a typical voucher program, let's say $2000, typical public school,
$7,500. Even if the vouchers came completely out of the local public school
district's budget, every time they lost a student, they'd be losing $2000, but
they'd lose a whole student and $5,500 remains behind. Approximately every
time you lose about 26-27 students, you've actually gained a free teacher, in
some sense, in a typical public school in the United States. So, I think in
terms of just the finances, it's not clear that this isn't really a
win-win situation. It's not quite that simple, but you're not taking very much
money out of the public schools when you take out a whole student....
Many of the voucher programs that we actually have in place, of course, in the
United States, don't take the vouchers from the local school district budget.
That, in fact, is the norm, to NOT take the money from the local school
district's budget. In that case, of course, the local district's budget is
pretty much protected and it has fewer students to take care of. So it can
spend that budget on reducing class size, on having better arts and music
teachers, having some sort of tutoring or remedial education, expanding some
form of extra curricular activities. It can do whatever it thinks is best with
If you could describe it from your point of view, what would an ideal
voucher system look like?
That's complicated, actually. An ideal voucher system would, first of all, be
universally available. I think that that's important, that it be universally
available....It has to be available to every student in the district or I think
it's not meaningful. If you only have it available to a very small group of
students, then there's always the concern that some small group is going to
remove themselves from the school district and leave behind a big group of
students who don't get to benefit very much from the voucher plan. And most of
the big benefits of vouchers are probably from generalized competition, as
opposed to benefiting just the students who actually take advantage of the
voucher. So you want it to be universally available.
That being said, the size of the voucher should depend, somewhat, on the goals
that we talked about, like the racial integration of the school that the
student is going to. Whether the school has, if it's a private school,
...selective admissions or whether it admits students by a lottery or on a
first-come/first-served basis, which gives it much less opportunity to select
students. So you would want to give a larger voucher to a school that doesn't
have an opportunity to do selective admissions.
The voucher should, definitely, be means-tested. That means that very well off
families would get a very small voucher, perhaps even no voucher, if they were
really well off and that poor families would get a larger voucher. The voucher
also has to take into account whether a student is disabled or costs more to
educate in some way, because you want disabled students to have opportunities
to make choices, and they're only going to be able to do that if the voucher's
big enough to cover the cost of educating them. We want schools to feel that
that child is a child that it needs to attract. And, so that's one of the
things that you want to build into an ideal voucher program, too....
One of the things that we've seen in charter schools developing in the areas
you're talking about here, is that there's a tremendous range of the charter
schools. Some of these charter schools are terrific and really deliver
wonderful services and have to be accountable to the state for standards and so
forth. And others, either because there's not a real strong accountability
system in place or because it's just kind of a fly-by-night set-up, they aren't
so terrific alternatives. But I guess the argument, then, an economist might
make is that those would then fall by the wayside because they wouldn't hold up
enough in the marketplace.
Right. One does not want students to go to schools that are fly-by-night
schools, but parents have relatively good judgement about whether their
children are getting a reasonably good education. And in a charter school
plan, say, parents always have the option to return to their local public
school. So, if they were happy with the local public schools and they send
their child to a charter school to try it out and it doesn't seem like it's
better, they usually withdraw the child and take him back to the local public
schools. They may try a different charter school that is doing better, that
has a better reputation with parents, but it's not as risky a venture as one
would think because you're not stuck there in that under-performing charter
school. You can go back to the regular public schools. You can try out a
different charter school. And those schools that no parent wants are not
going to survive very long. I think that's the beauty of the market....
Let me ask you sort of the macro picture here. Here's Shaker Heights, which
is an upper middle class community, solidly upper middle class. And people
there, in general, seem to have quite an investment in the education of their
children and are willing to tax themselves enormously to pay for a very good
public school system....Just down the road is Cleveland, a school district
that, at one point, was $150 million dollars or so in debt. Schools were
falling apart and there didn't seem to be the economic ability to generate the
funds that were necessary to repair those schools, repair them physically and
repair the education in those schools. Isn't the sort of crux of this problem,
or one of the fundamental cruxes of the problem in education, this tremendous
disparity in income that people have?
School finance or the degree to which a school system only reflects the amount
of money of the people who live around it is, actually, a somewhat separate
issue from school choice. For the last 30 years we've had very active policy
making on what's called school finance equalization, which is the attempt to
make sure that schools that serve parents who do not have incomes are actually
able to spend about the same amount as schools who serve richer parents, or
middle class parents. And every one of the fifty states has been very
active on school finance equalization. Every state legislature has a program
to equalize school finance and many state courts have been involved in it.
School spending has been equalized between rich and poor districts within a
state to a great extent over the last 30 years. It is not perfectly equal,
by any means, but average school spending has risen, as I said earlier, by
about 85% in the United States, on average. And, the poorer districts have had
their spending rise faster than that and the richer districts have had their
spending rise more slowly than that. So they have drawn together, gradually,
I think that it is important that schools that serve poor families have enough
money for education, but if you look at a school district like Cleveland, the
public school system is spending much more on a per pupil basis than any of the
private schools that parents who take the voucher are going to have their
children receive in those private schools. The disproportionate spending in
the public school versus these private schools is, perhaps, 2 to 1, maybe 3 to
1 in some of the private schools; which suggests that it's not just about
money. It's partly about the money and it's partly about making sure that the
money is well spent.
Specifically, if you look at teacher salaries in the Cleveland public
schools, they're far higher than in the Catholic schools. Catholic schools
can't afford or aren't paying their teachers nearly the same.
...It's typical in the United States that private school teachers are paid
about half of what public school teachers are paid. That's been what the ratio
has been for quite some time....
If we've got these problems in K through 12, [and] we want to improve
student performance, particularly in schools where students have been
underserved, what should we be spending money on?
I think one of the reasons people are so focused on school choice as a reform
is that people think that it will be one of the things that really improves
student achievement in the United States. I think it has enormous potential to
improve achievement. We have seen that when we allowed competition in other
areas of American life, say, deregulated some industries, we've seen enormous
improvements in efficiencies, which in schools, really means more
I think, as well, some of the things that we know about schools tell us how it
is that choice would actually bring this about. For instance, we know that
some teachers are just much more successful in educating students than other
teachers. There are individual teachers who are just very good teachers and we
can pick them out very easily in data. You can see that Mrs. Smith is just
very good at teaching math year after year after year.
And what you want to have happen, is you want to have schools go after the Mrs.
Smiths of this world, get them into teaching, keep them in teaching, make sure
that they get the rewards that they need to stay in teaching. And, right now,
schools don't have a very strong incentive to make sure that it's Mrs. Smith
who's in the classroom and not someone else. And parents can usually pick out
the best teachers. Many administrators can pick out their best teachers, but
right now, the system doesn't have very many rewards for people who are the
best teachers. I think that choice would put a tremendous amount of pressure
on a school to reward its best teachers, because it would be attracting
parents. It would be ensuring its own financial future by attracting parents.
So that's one way in which choice puts pressure on a school to make the
decisions that we think it ought to be making anyway....
In addition, not only are there some teachers who are very good at teaching,
but I think there are some administrators--school leaders, I guess I would like
to call them because not all of them end up in administrative positions--who
just are tremendously good at organizing students, at understanding what a
group of students need, at designing a curriculum that really works for a group
of students, whether they are suburban students or whether they are inner-city
students. Those people need to be empowered to a certain extent. They need to
be allowed to exercise what is essentially a tremendous entrepreneurial and
managerial skill. One of the things that I like about some of the choice
schools I've visited, is that as soon as you walk into the building, you are
aware of this management style--pedagogical style--way of getting the kids
involved in the enterprise of learning. And it's not the same in every school,
but you can feel when it's working.
We've also been in some--whatever you call them--alternative magnet schools,
in other words, schools within the public system that have done the same thing.
They say, ''We're going to have a science-based curriculum.'"'We're going to
have a arts-based curriculum.'' And they usually have some terrific, very
dedicated principal or administrator who has this vision and whose going to
carry it through, no matter what the school bureaucracy has to say....But we've
also had some of those people say, ''That's great because that's still within
the public school system. We're not privatizing the system." And they prefer
I don't think it's an either/or situation. I think that the goal of school
choice and school reform should be that every school in the United States is a
school that's run by somebody who really cares about this enterprise and whose
at good at it. And some of the schools are going to end up being private
schools and many of them, probably the vast majority of them, in the
foreseeable future, will end up being public schools.
What we hope is that the public schools will be able to improve, especially in
response to competition, and that competition will empower the people in the
public school system who know how to do this job. Many of them struggle
against bureaucratic forces that don't make it very easy for them to do the job
that they really know how to do. But, in a world with more competition, those
people who know how to improve a public school are going to be much more
valuable people and one hopes that they will get the power to do what they want
to do. So they would stay within the public system. They would never move to
a private school. And most of the students would probably stay with them in
the public systems....
Vouchers, in particular, are kind of a polarizing issue?
I think that people get more polarized about school choice issues than they
should get polarized about them. I think that many of the benefits of school
choice are understood by both people who are against and for state vouchers for
charter schools. In particular, people tend to be pretty willing to recognize
that there are probably some benefits from competition. I think that Americans
have a good relationship with competition. We know that it has benefit. I
think that people tend to get more polarized on issues related to the sorting
of students among schools, racial integration being one example, but by no
means the only example. And I think, a lot of the polarization is unnecessary
because I think that these issues can be managed if people sit down at the
table at the beginning of a school choice reform and write down their concerns
and try to build them into the policy. And so, I think the polarization there
is really unnecessary. I think that people should come to the table and design
a good policy. That's the answer.
What about the church/state issue? ...We've talked to several people about
this who are involved on opposite sides of the lawsuit in Cleveland, for
instance, over the voucher program because in Cleveland, most of those students
are going to Catholic schools. So the issue is, should tax payer money be
spent to send a child to a religious school? What do you think about
I think that the church/state issue is actually overblown when it comes to
school choice for the following reason. Right now we have small, essentially
experimental school choice programs. If you only have 1,000 students or 2,000
students in a voucher program, particularly if it's privately funded, and it
might not be around forever, what you're going to see happen is that people
will go to the existing private schools when these vouchers show up. The
vouchers are not big enough to allow someone to build a new private school and
we don't know that they're going to be around long enough for someone to want
to build new private schools. So, children take these vouchers to existing
It so happens that most of the existing private schools that are very
inexpensive are parochial private schools in the United States. But, if we
were to have a school voucher policy that was more universal or more general,
and if the size of the voucher were to be somewhat larger, instead of being
$1500 or $1000, it were to be something closer to per pupil spending in the
United States, even if it were only 2/3 of per pupil spending in the United
States, it would still be high enough so that what we would get would be
private schools that were created to take students who have vouchers.
New private schools?
New private schools.
Not necessarily religious schools at all.
...My guess is that if we were to have much more universal vouchers, most of
the private schools that would come into existence would not be religious
private schools. That's just my guess. I don't think Americans are
sufficiently religious so that they want to have their children in religious
education and they're willing to pay any sort of price for it. If you were to
have a voucher program, also, that said you get a bigger voucher if you send
your child to a school that doesn't have religious content then you do if you
send your child to a school with religious content, I guarantee a lot of
parents would choose the larger voucher and take their kids to church on
Sunday, or to the mosque, or to the synagogue.
...Do you, personally, have any feelings, pro or con, on this issue of
whether, in Cleveland, a child should be allowed on a voucher to go to a
...I'm not a legal expert. I can't say whether this is the right separation of
church and state. What I can say is that I think the fact that most of the
people who are taking the vouchers are going to religious private schools is
not indicative of of their being constrained to take religious private
education. I think they have secular options, like the community schools.
They have the magnet schools within the Cleveland public school system. They
can stay in the regular Cleveland public schools--and this is just one of their
options. So I think no one's being constrained to take religious education....
what do the candidates say? ·
how bad are public schools? ·
is "choice" the answer? ·
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