There are two new papers with some results on school choice that I want to highlight and also use to illustrate a broader point. The first is an experimental study a small voucher program in New York City that showed vouchers increasing college attendance among African-American students:
Overall, we find no significant effects of the offer of a school voucher on college enrollment. However, we find evidence of large, significant impacts on African Americans, and fairly small but statistically insignificant impacts on Hispanic students. A voucher offer is shown to have increased the overall (parttime and full-time) enrollment rate of African Americans by 7.1 percentage points, an increase of 20 percent. If the offered scholarship was actually used to attend private school, the impact on African American college enrollment is estimated to be 8.7 percentage points, a 24 percent increase.
The second study gets at the very interesting question of whether lottery based studies show improved outcomes because those receiving vouchers get a better education, or if the lottery motivates them somehow. This study takes an interesting approach to disentangling this attendance of lottery winners vs lottery losers after the lottery is decided, but while the students are still attending their original schools. They found that lottery winners have 7% lower truancies than losers, and the effect is especially strong for older male students who experience a 21% decrease. Importantly, the losers did not experience an increase in truancy compared to otherwise similar students who did not participate in the lottery, meaning that the lottery has increased motivation among winners, not decreased it among losers.
This study is interesting because on the one hand it means that the positive impacts of school choice on grades cannot be entirely interpreted as higher quality of choice schools. On the other hand, this does not diminish the positive results by any means. It just highlights a previously underappreciated mechanism through which choice increases performance. As the authors of the study point out, this is consistent with the growing literature from Heckman and others showing that non-cognitive skills affect outcomes. It should not be surprising that the students who most wish to leave a school and attend another will be motivated by their ability to do so.
But the bigger point I want to draw from these studies is that while they both emphasize the positive impacts of school choice, they both focus on the direct effects which are not the most important benefits we would expect competition to bring. Imagine, for instance, if governments had a long-standing monopoly over restaurants, and that laws were passed marginally liberalizing this and allowing some private restaurant attendance. Would we really expect the primary benefits of allowing competition in restaurants to show up as the success of the first restaurants to arise over the existing government run incumbents? Competition allows evolution, and unplanned systemic progress. This type of progress will not be seen in studies like the first one that look at small voucher programs which aren’t going to affect the system.
Furthermore, this type of evolutionary progress will be hard for studies that compare the performance of any existing schools to capture. New schools will have a lot of learning to do, and the best schools will evolve to be the best over time as they learn what works best and how to best serve local populations and labor markets. But by the time this evolution has produced it’s biggest gains the system will be closer to competitive equilibrium, where would expect the public schools that survive to perform as well as the private schools that survive. At no point in this process will comparing charters or private schools and public schools reflect the largest gains of school choice. At some points you would expect zero difference.