Despite most charter schools’ lack of equitable access to state and local education funds, many have reported positive results, particularly in cities. But there’s little research on how effectively charter and traditional public schools (TPS) use their dollars to produce academic gains. So let’s welcome a new report from Corey DeAngelis and his colleagues at the University of Arkansas that examines this issue in eight U.S. cities: Atlanta, Boston, Denver, Houston, Indianapolis, New York City, San Antonio, and Washington, D.C.
The analysts compare charter and TPS cost-effectiveness and return on investment (ROI). They calculate the former as the ratio of per-pupil school funding, including both public money and philanthropic donations, to average eighth grade 2015 NAEP math and reading scores. And they compute ROI as the ratio of schools’ overall K–12 education investments to students’ projected lifetime earnings, which they measure using three metrics: each location’s 2016 average statewide earnings, CREDO measurements of learning gains, and the estimated impacts of cognitive ability on lifetime earnings.
De Angelis et al. find that, for every $1,000 in school funding, charter schools produce an average of 4.34 more points on NAEP reading than traditional public schools, and 4.73 more points on NAEP math, across the eight cities. This equates to a 32 percent and 33 percent advantage for reading and math, respectively. Indeed, charter schools in every city examined were more cost-effective than TPS in both academic subjects, although the differences vary. In Washington, D.C., charters are 67 percent more cost-effective in reading and 68 percent more cost-effective in math than the city’s TPSs, but Houston charters are just two percent more cost-effective than TPS in both subjects.
The report also finds that the charter sectors in all eight cities produce a higher return on investment than the TPS sectors. Every dollar invested in a student who attends a charter from kindergarten through twelfth grade produces $1.77 more income for that student, on average, than if the student had attended a TPS. And those who split their K–12 experience between charters and TPSs will see an average of $0.72 more in projected lifetime income per dollar invested than those who exclusively attended TPS. Similar to the differences in city-specific cost-effectiveness, Houston charter sector showed the smallest ROI advantage, at 4 percent, and Washington, D.C., had the largest, with 85 percent.
Despite its rigorous descriptive analysis, however, the study has a few limitations. First, based on the availability of NAEP data, the analysis is limited to cities with charter sectors that outperform their TPS counterparts, which could skew results. Second, due to a lack of data, the report is unable to compare outcomes based on student demographics, including race and ethnicity, socioeconomic status, or special education enrollment. Such subgroup analysis is important because urban charter schools have been found to be particularly effective at raising achievement for poor and minority students, but have also been criticized for under-enrollment of students with special needs. And third, ROI calculations are based on projected rather than actual incomes, thus limiting their reliability.
As charter school advocates work to change state and municipal policies to provide more equitable funding, this report provides evidence that money allocated to charters is a worthy investment.
SOURCE: Corey A. DeAngelis, Patrick J. Wolf, Larry D. Maloney, and Jay F. May, “Bigger Bang, Fewer Bucks? The Productivity of Public Charter Schools in Eight U.S. Cities,” University of Arkansas (February 2018).