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Markets best to decide voucher program participation

As previously noted, in evaluating Louisiana’s scholarship voucher program, competing arguments are heard about how to measure the quality of the participating proprietary schools. Its opponents often argue that a grading system like that used for public schools should be employed, but not only does this have implementation difficulties, it also serves as a distraction from the real issue at hand.

In the state, public schools receive an annual grade that is at least half determined by progress in learning with factors of diploma completion (high school) and course credits earned (high school and middle school), all the way to progress being the sole determinant (elementary school). Until this past year, with one exception the only benefit provided by this system was acting as an information device for families to get some idea of how their school matched up to others and to an ideal. The exceptional benefit was that schools which consistently had the lowest, failing grade could become subject to corrective action. Thus, the only policy benefit that the system had was to create an incentive for the worst schools to improve or lose autonomy of varying degrees.

This left the large majority of public schools in the state unaffected by any policy levers that the grade could induce to improve their performances. Scores might have public relations and morale ramifications, but they carried no consequences as A and D scored schools were treated the same. But with the advent of the voucher program, suddenly these grades mattered, for now students from lower-income families could bail out of a D school, and even a C school under certain conditions, along with those of the F (failing) schools.

What generally is not realized about this advent is that school district officials dislike the program not only because it reduces state money coming to districts, as the money follows the student out of it, but it also holds them more accountable courtesy of the rating system. This creates extra pressure on these officials, adding to that already exerted by special interests representing employees and local centers of political power whose agendas do not place primacy on educating children, by increasing conflicts between fulfilling goals of these groups and in improving education.

So as a means of relieving this pressure, many suggest extending the grading system to the proprietary schools in the voucher program, arguing that schools should score in the A and B range that is above the level that would qualify a public school student to use a voucher, in order for these to participate. That way, they can put a pincer on the pipeline of dollars fleeing their districts, increasing captivity of warm bodies, which serves as the inverse to accountability and therefore reduces that.

But applying this system outside the protected model of education delivery misunderstands both the mechanism of how a grading system works and its theoretical purpose. On the instrumental side, as previously mentioned, it can be difficult to utilize a grading system for several reasons, the first of which being it’s never a straight comparison. That’s because the entire student population of the public school is being graded, whereas only a subset of the proprietary school is subject to this.

More practically, information may not be available. A small portion of data may be unavailable for federal privacy law reasons. Also, the cohort numbers are often too small to be able to make statistically reliable or valid measurements to construct a scoring mechanism, whereas any public school will have populations large enough to be able to do so. Finally, given that the earliest grade at which testing occurs is third (and going any earlier generates much dispute in terms of the validity and reliability of such tests), some schools simply cannot be scored (and as of now, the largest portion of children with vouchers is in the earliest grades).

All in all, this means that a scoring mechanism of much usefulness that replicates those for public schools simply cannot be manufactured for uniform application to proprietary schools. Yet, more importantly, an argument for a scoring system for proprietary schools misunderstands the uses and purposes for one and for why a scoring system for public schools came into being in the first place.

Public schools, when government policy does not aid in an additionally meaningful way proprietary schools, operate as monopolies in their districts and/or defined attendance zones. Thus, no market mechanisms exist to assess their quality, the surest of those being their ability to attract families as clients – better schools attract more customers, all other things (such as pricing) equal. Instead, families are held captive unless they have the purchasing power to choose an alternative to meet the state requirement that their children up to a certain age get educated.

Therefore, to be able to discriminate by quality, it is appropriate to create a scoring system absent these market signals for those without resources to choose an alternative. However, that does not apply to proprietary schools that already operate within the market. As long as the state forces availability of adequate information for families by which to make a choice – including the very statistics that could be used to create a score – the market-based decisions they will make by definition would be superior in ranking schools than the validity and reliability of any index score. That mechanism would serve only as an artificial impediment or unnecessary distorter of choices provided to families.

Currently, the state has standards that must be met for proprietary schools to participate in the voucher program that do not include a performance score. It supplies test scores and other information to parents interested in making a choice among these. It even uses the scores that are computed, as imperfect as they may be in that context, as criteria to put caps on the number of spaces a school may offer for voucher students. These standards more than create conditions for the market to render a valid judgment on the provision of educational quality by proprietary schools, and thereby secure optimal use of taxpayer dollars. Basing provider participation on an ill-suited scoring system therefore is unhelpful.


Anonymous said...


"...for now students from lower-income families could bail out of a D school, and even a C school under certain conditions, along with those of the F (failing) schools."

My recollection is that about ONE out of thirty-seven or thirty-eight could TRY to do this, a sparse few compared to your inference that all could.

On top of that, the parents, grandparents or others are making the decisions for these select few (2%), what you apparently call the "market", without any real, reasonable, easily-understandable guide or reference as to potential schools to rely on, and most of whom probably are unqualified to make such a decision even with such a guide.

So, in essence, the program is a one out of thirty-something shot for a school selection in the dark as to its quality.

Oops, I forgot. The market will take care of it.

That is a marvelous plan to upgrade education in Louisiana.

Your shot, Professor.

Jeff Sadow said...

To remind you, "could" is the past conditional of "can," meaning conditional. Because there aren't enough slots made available, only a small proportion will be able to take advantage of the program. Do work on your reading comprehension.

And on your knowledge of economics as well. Even the smallest marginal change in demand relative to competitors for a supplier means it loses revenue in the case of monopolists whose prices are fixed by law (public schools accepting MFP money). Unless you're a supplier of poor quality, you improve your performance to try to recapture that demand. Thus, market forces introduced into a one-size-fits-all model of education improve even those institutions operating under that model, even if those forces are at the margin.

Anonymous said...

Glad to see that u r paying attention.

But, it's the same old stuff.

Keep trying to convince that a meager few being able to change to another school that they really have no idea if is actually better will significantly change education in this State.

If you are really watching, obviously, it is all for show, political theater, and most of the participants are simply, but tragically, being used.

And you continue to support it.