We here at Fordham love a good school rating system, and one of the most popular independent rating platforms is GreatSchools. Once a California-specific hub for school quality information, GreatSchools went national in 2003 and now provides ratings for over 100,000 public schools around the country. At its best, access to clear, intuitive information about local schools allows families to make better decisions about where to educate their children. But a new study from Duke University’s Sharique Hasan and the University of Florida’s Anuj Kumar highlights one potentially negative consequence of this information boom: The availability of school ratings appears to coincide with greater financial and racial inequalities between zip codes.

GreatSchools expanded regional availability of its ratings slowly between 2003 and 2012, allowing Hasan and Kumar to compare otherwise-similar zip codes before and after the change (to follow trends, their analysis extends through 2015). They tracked several variables in each zip code, including housing prices from Zillow.com, annual household income from the IRS, and regional racial and ethnic composition from the Census Bureau. GreatSchools itself uses a 1–10 school rating scale overall, once based only on test scores and now incorporating a variety of factors like attendance and advanced course-taking, but to compare schools with GreatSchools ratings to schools without, the researchers also collected state math test scores.

They find that the availability of GreatSchools ratings accelerates the divergence between zip codes in home prices, annual income, and racial composition. Among zips with comparably high-performing schools, those with available ratings saw an additional 3.5 percent increase in housing costs. When Hasan and Kumar compared high- and low-performing zip codes, they found that the introduction of ratings caused an additional $9,000 of divergence in home prices and an additional 1.6 percent increase in the share of wealthy families. In general, only after school ratings became available did divergences between academically similar zips start to appear.

Additionally, zip codes with high-performing schools and available ratings saw increased migration into their boundaries and a greater number of residents staying put. Likely as a result, these zips also saw a change in racial and ethnic composition, with an additional jump in the share of white and Asian residents, a minor drop in the share of black residents, and a significant drop in the share of Hispanic residents.

In short, the authors say, “access to school performance ratings appeared to accelerate, rather than reduce, economic divergence across zip-codes in the U.S.”

This is likely because, while the ratings themselves are free for anyone to view online, “affluent and well-educated families are simply in a better position to act on [them],” according to an article on The 74. Not every parent has the means to change their address at all, much less to move into a better-rated school district. Put another way, school ratings are in some sense achieving their stated purpose, enabling families to learn about better schools—but divergences appear when only a select group can actually choose to enroll in those schools.

More research is needed into the effects of widely-available school ratings, especially now that many state ESSA plans include similar school grading systems. GreatSchools did not select their represented zip codes at random, which may have led to slightly skewed results in Hasan and Kumar’s study, and zip codes themselves can be fairly large and unaligned with school district boundaries. Moreover, as test scores alone are often connected to family income, the demonstrated economic divergence reminds us of the importance of including student academic growth scores in a school’s overall rating (something not all states are doing). Fortunately, GreatSchools has recently done exactly that—and time will tell how these more comprehensive ratings affect communities, families, and students themselves.

SOURCE: Sharique Hasan and Anuj Kumar, “Digitization and Divergence: Online School Ratings and Segregation in America” (October 2018).

Jessie McBirney is a development and research associate for the Thomas B. Fordham Institute. A California native, she moved to Washington, DC, after graduating from Biola University with a bachelor's degree in political science. Most recently she worked at the Council for Christian Colleges & Universities, doing government advocacy on issues such as financial aid and college accreditation.