Topic: Education and Child Policy

Welfare for the Wealthy (an Ongoing Series)

An earlier post noted the hot political trend of convincing the upper middle class and the wealthy that they are financially vulnerable and in need of government assistance.

From loan subsidies for McMansions to blue-blood public works, from the doling out of market power and financial support to businessmen, to the offering of government money and tax breaks to (usually well-to-do) people who consume in a government-approved manner, politicians of Red stripes and Blue are all about helping the down-and-out in the (gated) community.

Such welfare-for-the-wealthy is the subtext of Sunday’s NYT story about the Children’s Health Insurance Program. CHIP was once intended to help children in families that are low-income but that do not qualify for Medicaid; now Congress is pushing for the state-operated/federally supported program to use its money to cover families up to four times the poverty level (e.g., a family of four earning $82,600 a year) — that is, nearly all families in the second-highest income quintile, aka the upper middle class.

The NYT article includes a provocative figure about the effects of CHIP. When the program was first implemented, the percentage of families with income between the poverty level and 200% of the poverty level (i.e., the families whom the program was intended to help) with uninsured children began to decline, falling from 20% in 1998 to about 12% by 2002. However, the percentage of those lower-income families with privately insured children also began to fall over that time, from about 55% to about 45%. Since 2002, the percentage of uninsured children in that income range has roughly plateaued while the percentage of children with private insurance has continued to fall, to about 35 percent by 2006. This suggests (though, by itself, does not prove) that, by 2002, CHIP had gone about as far as it could go in reducing the percentage of uninsured children in poor families; since then, CHIP has simply displaced private insurance — a dubious policy goal.

Given that, it’s no wonder politicians want to mission-creep CHIP into wealthier income brackets. But one must wonder what the next welfare-for-the-wealthy program will be. Perhaps a chicken in every pot and a Lexus in every garage?

Market Education Debate, Part Three

Sara Mead of Education Sector continues our discussion of education markets here. She rounds out her post by impugning my professional integrity, but not before she has misrepresented my position. I’ll begin at the beginning.

Mead claims that I advocate letting Chilean children languish under its current voucher system which financially discriminates against private schools serving the poor. I said no such thing. Among the many changes I would make to the Chilean system, the first would be to equalize public and private sector funding levels.

Mead then manages to combine two distinct errors into a single sentence: the first, a misrepresentation of the evidence, and the second, a non-sequitur. She writes: “Leave aside that it’s not clear [that expanding Chile’s choice program] would be desirable, since poor students in Chile’s private schools perform less well than those in its public schools.”

First, as I pointed out in my previous post, Chile’s government schools only outperform the private sector when they receive between 150 and 300 percent of the voucher amount – and it is government schools serving the poor that enjoy targeted federal funding programs not available to the private sector. When they receive only about as much as the voucher, or even somewhat more, government schools perform worse. So, by equalizing funding across sectors, Chile could make significantly more efficient use of its educational dollars in serving all its children. This 2002 finding by Sapelli and Vial is discussed in detail in the pieces to which I have previously linked.

Second, the non-sequitur: Even if Chile’s government schools were outperforming its private schools in serving the poor (which, taking funding levels into account, they are not) it would not follow that the choice program lacked value. That’s because the competition produced by the choice program has been improving achievement simultaneously in both government schools and private voucher schools. This result was demonstrated by researcher Francisco Gallego, and is also cited in the pieces I’ve linked to.

Next, let’s turn to the Netherlands. Ms. Mead complains that “Coulson doesn’t even engage with my argument that the situation of the Netherlands is fundamentally different from that of the United States in ways that make it unhelpful as an example here.” Mead presented no such argument. She simply claimed, without rational justification, that because the Dutch adopted a voucher system to end religious strife and ideological dissatisfaction over the content of government schooling, their experience doesn’t apply to us. A claim is not an argument, and this particular claim is simply wrong.

The earlier Dutch conflict over the content of its government schools is not a point of divergence between our countries, it is a point of similarity. St. Augustine’s Church was burned to the ground in 1844 during Philadelphia’s “Bible Riots” which were fought over which version of the Bible, Protestant or Catholic, would be used in government schools. To this day, there is a an ongoing cultural battle between Red and Blue America over what should be taught in public schools. Both our countries are pluralistic, and there is no reason to believe that the general international pattern of supply rising to meet demand under school choice programs would magically take a holiday in the United States.

If Mead wants to attempt an argument to the contrary, she is welcome to do so, but she hasn’t made one yet.

A related point that Mead does not seem to have internalized is that the usefulness of the international data is to be found in the patterns that exist across nations. When a consistent pattern of success or failure can be discerned for some given school system across many different times and places, it suggests that there is something truly systemic at work, and not simply accidents of circumstance – because the circumstances are different, but the results similar. The degree of confidence of such conclusions is proportional to the breadth of evidence across which the patterns are found – so the more evidence we look at, the more sure we can be.

Supply has always risen to meet demand in the private education sector, across nations, except to the extent it has been obstructed by government interference, such as the funding discrimination that exists in most nations, or the regulations imposed on private schools that stifle the specialization that contributes to their appeal. Sometimes it rises even despite these impediments, as in India and parts of Africa today.

This search for patterns across time and place has a name: “natural experimentation,” and it is used by researchers in fields from epidemiology to cosmology. It is also the methodology underpinning Jared Diamond’s fascinating analysis of the fates of human societies in his Pulitzer Prize-winning Guns, Germs, and Steel.

Ms. Mead, apparently unfamiliar with this analytic technique, is at a loss to understand why I have looked so far and wide to study market forces in education. Unable to discern that reason, she decides to impugn my integrity instead.

Mead characterizes me as a “disingenuous” ideologue who spends a lot of his “time trying to find examples that will support his ideological support for vouchers.” I, she claims, am “much more interested in expanding choice” for its own sake, whereas she, she tells us, is “much more focused on expanding the supply of high-quality schools serving poor kids.”

The truth, as I explained above, is more prosaic: I have studied the evidence of market versus bureaucratic school systems, serving children at all income levels, wherever it is to be found. Far from avoiding the study of conflicting evidence, I have sought it out, in both my historical work and my review of the modern international research. But Ms. Mead wouldn’t know that, because she is, by her own admission, unfamiliar with my work.

To impugn a scholar’s professional integrity by claiming that they cherry pick their data, without actually being familiar with that person’s work, shows poor judgment and a lack of intellectual rigor. Poor kids – all kids – deserve better from the education policy community.

Market Education — Understanding the Evidence

I recently wrote that that the private sector can and does expand to meet demand in response to large scale school choice programs. I gave as examples the Netherlands, Chile, Sweden, and Denmark, all of which have national school choice programs that resulted in expanded private education sectors.

Though she acknowledges that she is unfamiliar with the programs in Denmark and Sweden, The Quick and the Ed.’s Sara Mead claims that this evidence does not show “what Coulson believes it does.”

She supports that view by questioning the results in Chile and the relevance of the Netherlands, and by presenting American voucher programs as a putative counter-example.

These objections do not hold water.

First, Chile. As Ms. Mead correctly points out, the expansion of the private sector in that country has occurred more rapidly in middle and upper income areas than in low income areas. As I explained in my chapter in What America Can Learn from School Choice in other Countries, there are two main reasons for this: Chilean government schools serving the poor receive substantially greater per-pupil funding than do private voucher schools, and most of Chile’s poor are concentrated in rural areas.

The poor are poor, not stupid. Research shows that when Chilean government schools get total funding that is between 150 percent and 300 percent of the private school voucher amount, they start to do as well or even somewhat better academically. When they get roughly the same per pupil funding, they do poorly compared to private voucher schools. The poor in Chile are thus often making a wise choice when they decide to frequent the much higher spending government schools.

It is also the case that it is easier to open a viable school in an area of high population density than one of low population density. So, until the high-population density areas are saturated with schools, growth of private schooling in rural areas will be slower than in urban areas. If, as seems to be the case, Chilean private voucher schools continue to enroll a larger and larger share of students, this gap will eventually go away.

In the Netherlands, where government schools do not receive higher per pupil funding than private voucher schools, there is little difference in enrollment rates by income. In fact, the private Catholic school sector in the Netherlands has a slightly lower average socio-economic status than does the government sector, but its students nevertheless outperform their wealthier government school counterparts.

I could go on like this at length, picking apart the rest of Ms. Mead’s argument (e.g., existing U.S. voucher programs haven’t grown more because they are explicitly capped in size or funds!), but this is enough to make my point: if you actually look at all the relevant evidence, and make an effort to understand it, the kind of superficial objections that are offered by the anti-market crowd fall apart.

Ms. Mead adds that “If Mr. Coulson sends me a copy of his book and any other relevant materials, I would be happy to learn more about this.”

That’s a nice, polite thing to say. And I appreciate it. But, as scholars, we are not supposed to wait for the evidence to come to us with a bow on it. We are supposed to go out and find it, and if it is apparently contradictory, to try to make sense of it. And we should wait to offer policy advice until we’ve been able to complete that process with a reasonable degree of comprehensiveness and confidence.

I wish I could come up with a nicer way to say that, but it has to be said.

Tipping Point for School Choice in AZ?

The Arizona Republic gave an unqualified endorsement of school choice today, coupled with a stinging rebuke of the state Education-Industrial Complex, also known as “Big Ed” (yes, I will continue repeating this gimmicky label) for challenging this and other school choice laws in court.

It’s difficult to pick just one quote, but their opening will do nicely:

Of all Arizona’s attempts over the years to provide education options for poor students, the law allowing corporations to take a dollar-for-dollar credit on their taxes is the best-structured reform effort so far.

And they pull no punches on Big Ed:

Despite the indisputable value it provides students and their parents — that of real education options — the program’s opponents have gone to court against it and other education-choice programs . …  It would be a shame to see such programs flounder on the specious fear that if you give vouchers to disabled kids, or to kids at the rocky bottom of life’s well, that public education itself will crumble. Simply put, it won’t. Education choice strengthens the underlying system. Someday, with luck, opponents of reform will figure that out.

The Arizona Republic is fearful that the voucher programs for disabled and foster children might have a tougher battle in court. But they rightly recognize that the challenge to the business tax credit program is desperate, bordering on completely absurd:

Earlier this month, a Maricopa County Superior Court judge ruled that the corporate tuition tax credit program was “legally indistinguishable” from existing tax-credit programs, and so passes the same constitutional muster.

Huzzah to the editorial board at the Arizona Republic, and congratulations to all of the Arizona organizations who have put their state at the front of the march to educational freedom. Don’t let up.

The Real College Sports Madness

Tonight the mighty Hoyas of Georgetown University will square-off against the Vanderbilt Commodores in a Sweet 16 hoops tilt.

In light of Georgetown’s dominance this season (28-6 overall, winners of 17 of their last 18, champions of the Big East Conference, and easy victors over the Commodores back in November), it’s probably a bit cruel to make Vandy face the Hoyas again. At least in the big picture, though, this is a fair match-up: both teams are from relatively small, private schools with pretty high academic standards, and both rely on voluntary fan and booster support to compete.

Unfortunately, a bit of breaking college basketball news on ESPN.com yesterday demonstrates that the latter is not always the case. The story was about Steve Alford leaving his head coaching job at the University of Iowa to take the reins at the University of New Mexico, a move many college hoops fans consider a bit of a step down. Iowa, after all, plays in the powerful Big Ten Conference, while New Mexico toils in the lesser Mountain West. So what was Alford’s inducement to trade corn for sand?

One possibility is that Alford was on his way out of Iowa anyway. He had only three NCAA Tournament appearances in eight seasons there, and not every Iowa fan exactly loved him. But, important as this might have been in Alford’s decision, it wasn’t what ESPN said ultimately attracted him to Albuquerque (it also wasn’t the city’s famed petroglyphs):

Sources said Alford was thrilled with the commitment from recently hired New Mexico athletic director Paul Krebs and impressed by the university’s decision to upgrade the famed Pit, which, according to Krebs, will receive $12 million from state government for renovation. There also is hope that the figure could rise to $20 million. [Italics added]

Now, as a matter of principle, I’m against forcing taxpayers to fund entertainment venues, arenas, or any of the other “bread and circuses” projects on which politicians love to lavish public dollars. But what really makes me angry about public schools like UNM building new basketball arenas with taxpayer funds is the unfair advantage it gives those schools over little private schools like Georgetown and Vanderbilt, who need people to give them money voluntarily. Facilities have been an especially big problem at GU, where the on-campus gym seats at-most 2,500 people, forcing the team to play almost all of its home games at the downtown Verizon Center and lose lots of revenue in rent.

Of course, UNM is not the only public university where the sports teams benefit from forced taxpayer largesse. Last May, for instance, the State of Minnesota decided to pay $10.25 million per-year for 25 years to help finance a new U of M football stadium. Similarly, the University of Pittsburgh’s Petersen Events Center, where the school’s basketball teams play, was financed with $10 million from the couple after whom it was named and $53 million from state taxpayers who, as always, have remained nameless. 

Now, colleges and universities in general — both public and private — benefit from all kinds of tax breaks, pork projects, and government subsidies, so don’t feel too sorry for Georgetown and Vanderbilt. When it comes to big-time sports, though, recognize what private schools are up against, and perhaps root for them a little harder. And, come to think of it, maybe do feel sorry for Vanderbilt. Georgetown is going to crush them tonight.

(In the interest of full disclosure, Neal McCluskey in a Georgetown graduate and a huge Hoya fan.)

Bob Herbert, What Are You Talking About?

Give New York Times columnist Bob Herbert credit — not many writers can pack three ridiculous claims into a single lede. Somehow he manages to do so in his latest column, which begins:

One of the weirder things at work these days is the fact that we’re making it more difficult for American youngsters to afford college at a time when a college education is a virtual prerequisite for establishing and maintaining a middle-class standard of living.

Did you catch all three? They are:

  1. “American youngsters” are finding “it more difficult “to afford college.”
  2. “[W]e’re” the ones who are “making it more difficult for American youngsters to afford college.”
  3. “[A] college degree is a virtual prerequisite for establishing and maintaining a middle-class standard of living.”

Let’s tackle these in order: 

If American youngsters are finding it more difficult to go to college, that’s not showing up in college enrollment data. The enrollment rate of recent high school graduates for 2004, the most recent year for which data are available, was the second-highest in history at 66.7 percent. The years 2000, 2002 and 2003 are also among the seven highest in history, with enrollments of 63.3, 65.2 and 63.9 percent, respectively. And, looking forward, projected enrollment numbers out to the 2015–2016 school year suggest enrollment rates will continue to rise.

What of Herbert’s claim that “we’re” the ones who are making it more difficult for youngsters to go to college? If by this he means that American taxpayers aren’t doing enough to help college students pay their tuition bills then, again, the data aren’t on his side. Funding for federal Pell grants has increased 80 percent in real terms between 1994 and 2006, while the money available through federally subsidized student loans (Perkins Loans, Direct Student Loans, and Family Education Loans) has increased 87 percent in real terms over that time. Data from the 2003–2004 school year (the most recent data available) show that more than half of undergraduates that year received grant money (in the average amount of $4,000) while 35.1 percent of undergraduates received subsidized loans (in the average amount of $5,800).

What of Herbert’s claim that a college degree is a “virtual prerequisite” for a middle-class standard of living? To be sure, higher education translates into increased earnings over a person’s lifetime. However, people who lack a college degree are not doomed to a life of lower-class living. Earnings data for 2004 show that a high school diploma and some work experience can add up to a middle-class lifestyle. The mean earnings per person in 2004 were $37,897; the mean earnings for a person with only a high school diploma who was between 35 and 44 years of age were $32,060. If that person had some college education but no degree, mean earnings were $38,076.

Herbert’s column goes on to lament the debt burden incurred by recent college graduates, including grad- and professional school graduates. Remarkably, he gives no thought to the value of the degrees that were purchased with that debt. Fortunately, more-thoughtful people have done present-value calculations on various college degrees (see, e.g., these calculations by Arizona State’s Carey School of Business, or these by Don Burleson of Burleson Consulting, or these by MSN Money’s Liz Pulliam Weston). The general consensus is that a bachelor’s degree, after subtracting tuition and other college costs as well as lost earnings from the years spent in school, has a present value of about a quarter-million dollars. Advanced degrees provide mixed returns (my MA in philosophy is of great personal value, but it doesn’t deliver much bling in the marketplace), but degrees in law and medicine deliver a present-value payback of upwards of $1 million dollars or more. And the still-ridiculously-cheap associates degree is the best deal in higher education, delivering well over $100,000 in present value for a mere few thousand dollars in cost.

Now, ask yourself: Would you be willing to spend $5,000 in exchange for something worth $100,000? Or $50,000 in exchange for $300,000? Or $100,000 in exchange for $1 million? Apparently, Herbert wouldn’t — unless taxpayers subsidize him (more) to do so.

Herbert’s column strikes me as yet another example of the all-too-common “progressive” lament that not enough money is being redistributed to the upper middle class. He would tax people (including many with no college degrees) to help out the soon-to-be-well-off.

Curiously, Herbert’s column says absolutely nothing about the one obvious issue in higher education financing: Why has a four-year college education gotten so expensive? My Cato colleague Neal McCluskey has discussed that, and you can read some of his thoughts here.

The NCLB Backlash

David Broder delivers a pile of Beltway Consensus in his column today.  Broder insists that Bush fight his fellow Republicans on the Hill who have come back round to realizing that the Feds 1) Aren’t authorized by the Constitution to direct the education of the public, 2) Don’t improve education with their involvement, and 3) Just spend more money and make more trouble the more they’re involved.  Return to the consensus, he admonishes.  These folks, some of whom recently announced their legislative intentions at a Cato event, are leading what Broder refers to as a “backlash” against No Child Left Behind.

The column is rather unremarkable, but I love this closer:

“But the dissenting Republicans’ idea of letting every state set its own standards and measure its own progress is a certain way to consign many youngsters to second-class educations. And that would be a serious step backward.”

Getting a second-class education is bad, and sunny days are good!  Indeed.  But one can’t step backward if he doesn’t have the room.

The only way forward for education is to walk down the path of educational freedom. That means states putting parents back in charge of their children’s education and getting the Feds out of the issue entirely.