School Choice vs. School Choice

Policy Backgrounders | Education

No. 155
Friday, April 27, 2001
by John C. Goodman and Matt Moore

America's Current School Choice System

The vast majority of parents are already participating in a system of school choice. For example, there are 79 school districts within a 50-mile radius of downtown Dallas. Assuming each district has at least two campuses at each grade level, a typical family has a choice of about 158 public schools - provided the parents can afford to buy a house in any neighborhood and are willing to drive a considerable distance to work.

"Dallasites can choose from 158 schools -- provided they can afford a house in any neighborhood."

How well does this system work? Better than you might think. A study by researchers at Southern Methodist University and the Dallas Federal Reserve Bank found that North Dallas houses near higher-ranking elementary schools sold for about 20 percent more than houses near lower-ranking schools.1 The authors conclude that the market for education works surprisingly well. Parents can discern quality and the market charges a premium for it.

This conclusion is supported by an informal survey conducted by Dallas attorney H. Martin Gibson of housing prices in Highland Park - a wealthy Dallas suburb. Although most Highland Park homes are inside the Highland Park Independent School District (HPISD), a few are in the Dallas Independent School District (DISD). Gibson found that, all else equal, homes on the HPISD side of the street sell for 24 percent more than those on the DISD side. This implies that many Highland Park homeowners are paying about $72,000 just for the right to send their children to Highland Park schools.2

If the system works well for those who have money, how does it work for those who don't? What happens to families who cannot afford to buy a house or don't even own a car? Unfortunately, they're out of luck. Since the current choice system in Dallas and across the country rations educational opportunity through the housing market, it's almost inevitable that the children of low-income families will end up in schools no one else wants to attend. These are the schools with the worst teachers, the worst principals and the lowest test scores.

A compounding factor is that parents who can afford more expensive homes are much more adept at dealing with public sector bureaucracies. If a bad teacher or principal is identified at a school in a wealthy neighborhood, parents typically will complain until that person is transferred to another school. Then the parents at the next school will likely complain. This transfer process will continue until the worst teachers and worst principals wind up at schools where either the parents don't complain or nothing happens if they do. These invariably are schools in low-income neighborhoods.

"When educational oppourtunity is rationed through the housing market, low-income children will end up in schools no one else wants to attend."

Of course, it is possible to turn a truly bad school into a good one through some Herculean effort.3 But if the effort was successful and perceived to be permanent, "gentrification" would occur. Middle-income families would move into the neighborhood and bid up housing prices. Low-income residents would be priced out of the market and would have to move somewhere else. It is no accident that the worst schools are consistently found in low-income neighborhoods which lie predominantly in urban areas.4 Indeed, it could not be otherwise.

Read Article as PDF