Stanford economist says charter schools can pull U.S. out of educational slump

Steve Castillo SIEPR three

Former Secretary of State George Shultz, left, was a panelist at the economic summit. Treasury Secretary Henry Paulson, middle, and former Treasury Secretary Lawrence Summers, right, also spoke at the event.

Steve Castillo SIEPR Paulson

U.S. Treasury Secretary Henry Paulson delivered the keynote address at the annual economic summit of the Stanford Institute for Economic Policy Research on March 7 at the Arrillaga Alumni Center.

Caroline Hoxby

Caroline Hoxby

Stanford economist Caroline Hoxby casts an empirical eye on public schools in the United States and comes away gloomy. Student scores are on a par with Latvia and achievement levels haven’t changed for decades. Hispanic and black students still lag behind white and Asian students in test scores. The education level of teachers themselves has dropped.

But Hoxby, an economics professor, senior fellow at the Hoover Institution and SIEPR, and an expert on the economics of education, has hope. She told an audience of several hundred corporate leaders on Friday at the annual Economic Summit of the Stanford Institute for Economic Policy Research that charter schools—and public schools that adapt charter-school techniques—can do better.

Hoxby, who arrived at Stanford last fall from Harvard, compared charter schools to colleges and universities, where prospective students are treated as customers or investors, given choices about where to go, how much to pay and what courses to pursue.

Charter schools are successful, she said, because their administrators rule with a great deal of autonomy and are held responsible for the outcome (that is, unsatisfied parents can move their children to other schools).

To quantify the effects of charter schools, Hoxby and Jonah Rockoff of Columbia University studied two groups of students in Chicago, similar in background but with one important distinction: One group consisted of students who won a lottery to attend schools run by the Chicago International Charter School, while the control group was made up of students who lost the lottery and went to school elsewhere.

The result? Hoxby and Rockoff reported that youngsters who began charter schools in lower elementary grades showed higher subsequent achievement in school than the control group.

How do the charter schools succeed? They tend to have longer school days and school years (e.g., 220 days vs. 180 days) than public schools. Many of them require students to wear uniforms. There may be regular diagnostic testing. But the biggest differences, Hoxby said, lie elsewhere: "Teachers are the key to making schools work," she said.

She finds that financial incentives for public school teachers are not aligned with the interests of students. A teacher's pay typically is based on seniority, with an increase if he or she earns a master's degree. Hoxby contends that the ability to teach is not part of the pay formula, but should be. She suggested that a principal can tell early—after one to three years—whether a teacher has that indefinable quality that makes a talented educator. Those that don't have it should be let go, she said, adding that money may be better spent on younger, energetic, highly motivated teachers than on older, mediocre ones. As you might guess, she is unenthusiastic about teacher unions.

On another note, Hoxby said that while technology in the classroom has been a disappointment, there are some bright spots. Virtual classrooms may prove useful in rural areas where there are "high-aptitude kids who simply can't get the courses to get into highly selective universities," she said.

The keynote address at the Economic Summit was delivered by U.S. Treasury Secretary Henry Paulson, who spoke during a dinner at the Frances C. Arrillaga Alumni Center.