Topic: Education and Child Policy

Market Education: Will India Lead the Way?

Much is made of the fact that some sectors of the U.S. economy face increasing competition from the developing world. India, in particular, is singled out for its proliferation of call centers and computer programmers.

But few people stop to ask how a developing country in which English is only learned as a second language has been able to become such an important international contender for skilled jobs requiring English fluency. The answer, at least in part, is that a large and increasing number of Indian children are being educated in private, fee-charging schools that must compete vigorously for the privilege of serving them. Even in some of the poorest slums and rural villages of India and Africa, majorities of students attend these schools, and are better served educationally than their peers in the government-run sector (and at a lower cost, to boot). Among other advantages – from the standpoint of meeting parental demand – the vast majority of Indian private schools teach all their lessons in English, as opposed to state schools which typically offer English instruction only as a separate course, when they offer it at all.

But despite the considerable size and rapid growth of the private education sector, there are still millions of families in developing countries who find it financially difficult or impossible to gain access to it. But what if those countries kick it up a notch?

A recent story in DNA Mumbai quotes Infosys CEO Nandan Nilekani as saying that, “There is an urgent need for the government [to] provide vouchers to parents from the economically backward section. That way they can choose to enroll their children in private schools instead of the government-run schools, which are in a pathetic state.”

Adopting a truly free market approach to education, with financial assistance to ensure universal access, would be an incredible boon to the Indian standard of living, and an excellent lesson for rich countries still languishing under the pall of calcified government school monopolies.

…and None of these Little Piggies Went to Market

How close are we to enjoying truly free educational marketplaces in this country? Not very, according to our newly released Cato Education Market Index (CEMI).

Well over a year in the making, CEMI measures how closely existing school systems resemble free markets and rates education policy proposals on their conduciveness to the rise of markets. The verdict? No state in the nation even comes close. The two top scoring states, Wisconsin and Connecticut, tied with a score of 26 out of 100. 

Why is Wisconsin – with its vouchers, charter schools, and public school choice – rated so low? Why is Connecticut – which lacks vouchers and has few charter schools – rated the same?

The answer to the first question is that Wisconsin’s voucher program enrolls only about 1 percent of the state’s students, while its charter schools only enroll about 3 percent. These numbers are too low to have a significant impact on the level of education market activity statewide. And public school choice just isn’t close to real market activity because public schools are too standardized by state and disctict policies and regulations, can’t be operated for profit, don’t charge tuition, and neither open nor close exclusively in response to consumer demand.

Connecticut has among the most public school choice and the least intrusive public school regulation in the country, along with a truly free private education sector that is larger than the national average. But private schools serve only 11 percent of the state’s population, so it, too, only rates a 26.

Anyone interested in how the numbers were crunched can have a look the paper linked to above. The brave of heart may also want to dig into the uber-Excel spreadsheet that contains all the input data (100 data points per state), the calculations, and the tabulated results.

The full technical report contains regression analyses showing that higher CEMI ratings are correlated with both higher test scores and higher graduation rates.

Brief explanations of all the state ratings can be found here.

Jack Wenders, RIP

Jack Wenders, professor emeritus of economics at the University of Idaho, passed away at the end of November. Jack was a tireless champion of reason and liberty, and was very well known in Idaho for pointing out the shortcomings of the state’s bureaucratic, monopolistic school system, and how they could be overcome through parental choice and market incentives. I met Jack at a conference back in 2004 and was impressed not only by his knowledge but by his passion for the work. He will be missed by everyone at Cato who knew him.

Do We All Support Market Education Now?

Alan Bonsteel, president of California Parents for Educational Choice, has an interesting op-ed in the OC Register today arguing that the only folks still defending the government school monopoly are those who have a financial stake in its perpetuation.

I’m not quite convinced – I could name quite a few advocates of centrally controlled state schooling outside the government school employee unions – but he makes some thought provoking observations.

The Risible Hand to Meddle further in NY Higher Ed?

Newsday reports that the visible – and clumsy – hand of government is poised to interfere in NY’s burgeoning for-profit higher ed. market. But the Board of Regents’ impending move to impose strict new regulations on for-profit colleges is the wrong solution to the wrong problem.

If students at these colleges were paying their own way, the state would have no compelling interest in regulating them. The only reason the state presumes to interfere is that funding from New York’s Tuition Assistance Program goes to these schools, and it wants more oversight over how that money is spent. Rather than impeding market forces and freedoms by trying to inject central planning into a promising and dynamic part of the higher education sector, New York should replace its current Tuition Assistance program with a system known as “human capital contracts” or “equity loans,” in which the amount paid back by students subsequent to graduation is contingent on their earnings. These loans allow students to finance their own higher education, eliminating the need for the state to intrude in the market process. It’s a better, cleaner solution.

Don’t Know Much about Friedman

It took a little more than a fortnight for someone to appropriate the legacy of Milton Friedman in support of something that the Nobel Laureate probably would have opposed. 

In an article for National Review Online, former Speaker Newt Gingrich and his associate David Merritt call on the nation to “Renew Milton Friedman’s Conservatism.”  Whether chosen by the authors or the editors, that title betrays that someone missed Friedman’s point entirely.  In 1975, an interviewer asked Friedman whether it was fair to describe him as a “conservative economist.”  Here was Friedman’s response:

I never characterize myself as a conservative economist. As I understand the English language, conservative means conserving, keeping things as they are. I don’t want to keep things as they are. The true conservatives today are the people who are in favor of ever bigger government. The people who call themselves liberals today – the New Dealers – they are the true conservatives, because they want to keep going on the same path we’re going on. I would like to dismantle that. I call myself a liberal in the true sense of liberal, in the sense in which it means (inaudible) and pertaining to freedom.

Even more jarring is a policy proposal that the authors seem to associate with Friedman.  Gingrich and Merritt write:

We can transform health and health care to deliver more choices of greater quality at lower costs to every American. And government has a role to play. It can and should build an electronic infrastructure, much like government builds public school buildings.

I see two problems here.  First, Friedman often argued that it would be far preferable were government to stop providing education and instead just finance it.  That suggests he saw no need for government to build the schools.  Second, if Friedman ever took a stand on government provision of health information technologies such as electronic medical records, the lack of which is often regarded as a market failure, I’m not aware of it.  However, I have to suspect that left-leaning economist Brad DeLong more closely captured Friedman’s views on the subject when he wrote:

[Friedman] believed…that where markets failed there were almost always enormous profit opportunities from entrepreneurial redesign of institutions; and that the market system would create new opportunities for trade that would route around market failures.

That view is hardly supportive of having the feds provide health information technologies.

Gingrich and Merritt do not completely misappropriate Friedman’s legacy.  They do argue for a few free-market health care and education proposals. 

Should Public Schools Be Racist?

Can public schools make student assignment decisions based solely on race? That’s just one of the questions before the Supreme Court today in pair of school integration cases (Parents Involved V. Seattle School District No. 1, and Meredith V. Jefferson County Board Of Education).

My one sentence opinion on these policies:  Trying to promote meaningful integration through race-based school assignment policies is like trying to promote love through arranged marriages.

Put less briefly, these cases raise four important questions about race-based assignment:

- Is it legal (the only question the Court will address)?
- Does it do any good?
- Does it do any harm? And,
- Is there a better way to achieve the same goals?

I’ll leave a thorough analysis of the first question to the Justices and to Cato’s legal scholars, though it’s hard for me to fathom how anyone could find purely race-based student assignment decisions consistent with “equal protection of the laws.”

Do forced public school integration policies do any good? It is fair to say that the answer is no, since they have not even achieved the immediate result of integrating schools. After half a century of compulsory integration policies, public schools are little more racially integrated today than they were before such policies were introduced in the early 1970s. It is not even clear that racial balance at the school level is the right goal, since it does not necessarily produce meaningful integration. It is common for students to sort themselves into cliques along racial or ethnic lines, and to have comparatively little interaction with those outside their own group. Schools that seem “integrated” on paper do not always have meaningfully integrated hallways, lunchrooms, or even classrooms.

Do they do any harm? In numerous ways, yes. Attempting to force racial balance in schools through busing not only failed to achieve the immediate goal of public school integration, it dramatically increased residential segregation by driving the (predominantly white) middle class to the suburbs (middle class blacks fled, too, but were fewer in number). Denying students their first choice of public school based solely on race is likely to drive still more families to suburban districts that do not use such assignment policies (or to the private sector), hence further aggravating residential segregation. And clearly, denying children their first choice of school is harmful in and of itself.

Is there a better way? Of course! And better in every respect! The right solution is to introduce a system of financial assistance to ensure that all families have access to the public or private school of their choice. First of all, such programs lead to greater school-level integration and reduced residential segregation. Second, integration in the private sector tends to be more meaningful (children are more likely to choose to sit with peers of different races in private school lunchrooms than is the case in public schools). Third, the most significant educational benefits to private schooling tend to be enjoyed by African Americans, both in achievement and graduation rates.

An overwhelming body of evidence points to parental choice and market incentives as a better way of achieving meaningful integration and improved educational opportunities for minority children. Those truly concerned with advancing the cause of civil rights have to realize that race-based student assignment within a government school monopoly has been and continues to be both ineffective and counter-productive.