School choice was a prudent wager

North Carolina and other states expanding their school-choice programs over the past few years are betting on the power of competition to promote educational opportunity and boost student outcomes. Is it a prudent wager? Recently published studies may shed some light on this important question.

Proponents believe not only that giving families more choices among private, charter, and district-run schools will benefit those children directly but also that the need for existing schools to compete for students — and, indeed, for educators to enjoy more employment options — will make the entire sector more innovative and cost-effective.

Opponents grant that competition tends to produce such benefits, in private enterprise as well as sectors such as health care where government funds and providers play a big role. But they argue that K-12 education is fundamentally different. Charter-school expansions and Opportunity Scholarships will mostly benefit well-off families and children already likely to succeed, they predict, leaving other students and schools behind.

A 2023 study in the Journal of Public Economics examined nationwide performance by school districts and charter schools. Its authors found that for every 10% increase in the share of students attending charter schools in a district, average test scores in the district rose by .01 to .02 standard deviations and graduation rates rose by 1 to 2 percentage points.

Another 2023 study, this one published in the Journal of Human Resources, focused on charter schools in Massachusetts. It found that charter expansions were associated with increases in math scores among non-charter students and, perhaps not coincidentally, that district schools facing more competition from charters tend to transfer funds from capital and support services to teacher salaries and classroom needs.

More broadly, a 2024 study in the Journal of School Choice compared state performance on the National Assessment of Educational Progress (NAEP) with state-by-state differences in education freedom, as measured by how much the state facilitates parental choice among a variety of school types, including homeschooling.

The authors found positive and sizable relationships between education freedom and test scores (29% of a standard deviation) and gains in scores over time (15% to 21% of a standard deviation). Interestingly, most of the effect appears to be driven by choice in the public sector (within school districts themselves as well as magnets and charters). Other recent studies confirm the effect. In Los Angeles, allowing parents more ability to choose their publicschools resulted in better scores and higher rates of college enrollment. Something similar happened when Japan gave parents more choices among public high schools.

On the other hand, a 2022 paper in the journal Educational Policy reported the results of a meta-analysis of some 92 studies of school competition. The authors found small but positive effects on student outcomes — the rarity of negative effects on district-school performance might “ease critics’ concerns that competition will hurt those students ‘left behind,’” they wrote — but determined that competition with private schools generated larger benefits than competition with other public schools, including charters.

Now, I’m not saying all recent research supports the idea that school competition produces broad gains in student outcomes. A 2023 study in Educational Policy examined school districts in southern Florida. It found that increases in charter competition were associated with no significant change in test scores, even 10 years after the establishment of new charter options.

Still, I think it’s fair to say North Carolina policymakers have good reason to predict competition would spur educational improvement. We certainly need it. As I pointed out in a prior column, our state’s public schools were among the best in the country in converting tax dollars to student success in 2019, before the COVID-19 pandemic. But after the 2022 NAEP exams, North Carolina tumbled from 7th in adjusted scores to 29th — probably because we kept schools closed longer than Florida and other peer states did.

I think school choice will help North Carolina recover our lost ground. In the coming years, experience will test this prediction.

John Hood is a John Locke Foundation board member. His books Mountain Folk, Forest Folk, and Water Folk combine epic fantasy with American history.