School Choice Is a Good, Not Great Thing… Sort of

I have long supported school choice. There are many good reasons to share my position. At the same time, school choice in Indiana has not delivered the broad success its defenders claim.

School choice in Indiana began in 2000 with the first authorization of charter schools. Then, in 2008, the Mitch Daniels administration pushed for broader school choice, adding a limited voucher program and local school choice.

That local school choice, allowing state tax dollars to follow students to whichever school they attended, ended up being the biggest innovation. Since the Daniels reforms, the state has expanded the voucher program to include all but about 5 percent of the richest Hoosier families.

Back in 2000, about 12 percent of Hoosier children attended private schools. Today, it is about half that. The number of kids in charter schools (public schools operating on somewhat different rules than local public schools) has risen, but most students in charters are enrolled in those operated by local public school districts.

Ironically, the big winners of school choice, in terms of enrollment, are local public schools. Of course, that masks the reality that high-performing public schools are doing well with enrollment, while poorly performing public schools are losing enrollment.

That is the point of school choice.

School choice imposes competition into the marketplace for K-12 educations—and yes, it is a marketplace, but has hitherto been mostly limited to more affluent families. Today, a much higher share of families can access schools they feel better serve their children. In places like Gary, more than 6 in 10 kids take advantage of school choice, and in Muncie it is more than 4 in 10.

Imagine what would have happened to those city populations if families were unable to access better schools.

Still, there are several things we don’t know about the effects of school choice in Indiana. We do not have a good estimate of the causal effect of competition on underperforming schools. The preliminary evidence, from one as-yet unpublished study and from NAEP scores statewide, suggest it had a small positive effect. But these results are not yet conclusive.

We also don’t have the studies on charter school performance we need to draw big conclusions, and we have almost no longitudinal studies of student outcomes.

The saddest part of our ignorance on these matters is that it seems purposeful. Indiana has spent tens of millions of dollars on data collection of individuals in school and employment, and almost nothing on causal estimates of the effects of school choice (or almost anything else education or workforce related). Indiana is a full two decades behind West Virginia and Tennessee on education and workforce research. It shows.

Fortunately, we do know a few things. My work (with Dagney Faulk, see https://projects.cberdata.org/194/school-corporation-size-and-student-outcomes) finds that simple test scores and proximity of schools are driving most of the transfers between local public schools. So, families are choosing better schools that are nearby—important, but hardly surprising results.

Two studies, by Mark Berends at Notre Dame and Joseph Waddington at Kentucky, shed more detailed light on individual outcomes for transferring students. In one study (see https://doi.org/10.1002/pam.22086), they find that low-income children transferring from local public to private schools experience a decline in math test scores, for as long as students were tracked.

A second study (https://direct.mit.edu/edfp/article-abstract/13/2/227/10292/School-Choice-in-Indianapolis-Effects-of-Charter) focused on a broad set of school choice options in Indianapolis. It reports similar declines in students moving to magnet schools, private schools (including Catholic schools), but no effect for those students transferring to charter schools.

This research team also reports large differences in accountability between charter authorizers, which most likely affects student outcomes (see https://doi.org/10.3102/00028312231167802). There are numerous studies reporting poorer learning outcomes from online classes.

It is worth noting that, to really measure school performance, you must control of all the non-school effects on learning for individual students. That is devilishly hard to do well.

The best studies are performed by tracking students as they move between schools, as in these studies by Berends and Waddington. Their results, based on different times using individual student scores before and after changing schools, offers very robust conclusions.

Of course, school choice may have many other benefits for families and students. But when it comes to improving Indiana’s educational outcomes, the period of school choice has been a clear failure.

In 2008, when the Daniels administration expanded school choice, Indiana’s economy was already suffering from poor educational outcomes. The bellwether measure—adult educational attainment—was then a whopping 6.5 percentage points below the nation as a whole. By 2019, it had collapsed to 9.1 percentage points below. That loss stabilized after COVID-19 but is poised to worsen.

Unsurprisingly, this decline affected employment and wages across the state. One example is the quality of jobs. From 2000 to 2023, the average Hoosier worker saw their wages decline from 5.8 percent below the national average to 16.2 percent below. Indiana is a magnet for low-wage jobs.

With almost a quarter-century of school choice, Indiana’s economy is in a relatively worse place today, with a less-educated workforce and declining relative wages. The prognosis is for more of the same.

Poor educational outcomes are the fundamental cause of our economic woes. Recent cuts to education spending have magnified the problem.

Indiana now spends less money per student on K-12 and higher education than we did when the big changes to school choice came about (2008 to 2010). In fact, this year is probably the lowest per student spending by state and local governments in the past several decades. And yes, those data are adjusted for inflation, a quick and honest calculation that the governor and several lawmakers seem to struggle with.

Some of the blame must attend to those of us who supported school choice. We overestimated the benefits, so it is time to set the record straight. I still believe school choice is good for Indiana families. But insofar as it has been used to justify cuts in per student educational spending, it risks being Indiana’s single most damaging economic policy of the 21st century.