January 22, 2018 6:27AM

More School Choice Is Not Always a Step Forward

It’s the first day of National School Choice Week , a time when most school choice advocates embrace all types of educational choice programs. Many school choice promoters believe that every single incremental policy that expands educational options is an overall improvement. I disagree. You might be surprised about this, but I promise I have not pulled a Diane Ravitch. While I used to share the view that any incremental policy weakening government monopoly power would improve the education system overall, I have realized that there are potentially large costs that could result from expanding certain types of educational choice programs. While this is not a comprehensive list, here are three key concerns that I have with enacting and expanding every single choice option that becomes available.

Regulated Choice

The main problem with expanding regulated choice is that existing autonomous private schools will be nudged to behave like public schools. Independent private schools currently have to compete with educational institutions that are free at the point of entry. They have a clear financial incentive to accept school choice funding, even if it requires them to change what and how they teach. As Lindsey Burke and I have recently discovered empirically, voucher program regulation could lead to less specialization in the supply of private schools. In other words, we could end up with a more homogenous supply of schools than we had absent the choice system. Also, even if a private school choice program is completely unregulated today, policy-makers could decide to change that in the future, especially if the program is funded by public dollars. If a private school already serves a large portion of voucher students, they will have a huge incentive to put up with new regulations, which would essentially turn them into government schools.

Unbalanced Competition

Because I am confident in the ability of the price system to provide the information and the incentives necessary to increase quality and reduce costs, I used to believe that every single type of choice ought to be welcomed. After all, with a level playing field, the market would determine which types of choice would succeed and which would fail. However, this is not necessarily the case. School choice programs do not all receive the same amount of public funding, even within the same geographic location. In D.C., for example, the 2016 per pupil public funding amount for charter schools was about $14,000, while the average voucher amount was only around $9,600. Why should we expect educational outcomes to be equal across choice types when government favors public charter schools by giving them 46 percent more resources? In this sense, we shouldn’t be surprised that the most recent experimental evaluation of the D.C. voucher program found negative effects on student achievement relative to students in district and charter schools.

Opportunity costs

Of course, human capital is needed to push for expansion of educational options. But time and effort are the scarcest resources available. When human capital is allocated towards expanding inferior types of school choice, it is not being allocated towards expanding optimal solutions. This is the basic economic problem of opportunity costs. When hamstrung forms of choice—like public charter schools or heavily regulated vouchers—are expanded, and they fail to produce highly impressive results in the short-run, critics of choice are quick to declare market failure. Because this could shape public opinion against markets in education—and educational choice in general—acceptance of economically inferior school choice systems could reduce the possibility of future enactment of programs that more closely reflect market scenarios.

So what should we do? As with most interesting political debates, there is not a clear solution. But we should not simply look at the short-run costs and benefits of each individual program that is proposed. We need to make school choice policy decisions while considering long-run costs and benefits. To avoid my major concerns, the best politically feasible option we can embrace is a privately funded education savings account at the state level. Education savings accounts allow families to customize educational environments based on their children’s unique needs, and they allow for more price differentiation, which is necessary for a market to function properly. And because policy-makers could alter how they define which dollars are public, we should enact these policies at the state level.

And remember, even if it is counterintuitive, more school choice is not always an enhancement for educational freedom, especially when it reduces the diversity of schools in the long-run.