A Frightful Tale: The Milwaukee School Choice Wars

Milwaukee has a 23-year-old “priceless” tuition voucher program restricted to low income students, district-run chartered public schools, and some privately-funded vouchers (PAVE). Because it is our oldest and largest publicly funded tuition voucher program, a lot has been said about its results, including several incredible prominent claims that its outcomes should be decisive; that its effects would tell us if “school choice works.” That’s why the dueling studies, and the competing interpretations of them, deserve our attention.

Those prominent claims were incredible because a program “designed to fail” was tiny for its first eight (1991-98) heavily studied years — limited to just 1 to 1.5 percent of Milwaukee Public School (MPS) students, and the lucky applicants that received a voucher could use the vouchers worth much less than the MPS per pupil expenditure only at non-sectarian schools, which at the time was mostly just three of six really shaky schools. The program rules said the eligible private schools could cash the vouchers only if they accepted them as full payment, which amounts to price control; a devastating “pricelessness” restriction that persists to this day, with just one negligible exception.

A 1998 Wisconsin Supreme Court decision allowed expansion in the number of vouchers and allowed sectarian schools to enroll voucher users. But with the continued ban on co-payment (price control), voucher users must out-perform unsuccessful voucher applicants with voucher funding of slightly over half the amount supporting the MPS students. And the voucher users have outperformed the MPS students that were denied vouchers by small margins in some subject areas, but in those subject areas they have been no better. And other studies have found small so-called “competitive effects.” A better label would have been a broader “systemic effects” category, which can include additional effects besides rivalry for students.

The program rules give the MPS schools little tangible reason to behave competitively. MPS schools suffer few if any funding losses when students leave with a voucher. Lacking the tangible basis for competitive behavior, I have argued that sorting effects are a more likely the basis for the small MPS improvements attributed to the voucher program. Sorting occurs when parents transfer their children to schools they think will work better for them. That leaves more instructionally homogenous, teachable classrooms behind. The children that leave are the ones for whom the futile, assigned public schools’ attempt at a one-size-fits-all instructional approach is least effective. The voucher users are outliers in most of their classrooms. Their departure will help them as well as the children that stay behind in the assigned school.

Surveys of parents of voucher users have repeatedly shown them to be very pleased with the assigned public school alternative, which means the program has at least worked as an escape hatch. Nearly all studies have shown that they reap small gains in the tested academic areas plus, probably, customization benefits in the choice making criteria that standardized tests cannot capture. The escape hatch nature of the small, restriction-laden Milwaukee program is further confirmed by the assumptions and findings of several studies, including the purported “last word” on the program’s effects. Earlier findings showed that the “systemic effects” (impacts on MPS effectiveness) have been small, which led the authors of the “last word” to assume that unsuccessful voucher applicants were not affected by the voucher program; an implicit “no systemic effects” assumption. And at least in terms of the standardized test scores, the voucher users were not greatly impacted:

the achievement growth of students in the voucher program was [slightly] higher in reading but similar in math.

And now that school choice advocates have repeatedly “bet the farm” on the Milwaukee outcomes — a truly lousy market experiment — the pro-establishment spin doctors are swooping in for the kill. For example,from Diane Ravitch:

Anyone who looks at the NAEP reports on urban districts will see that after 22 years of vouchers, charters, and competition, Milwaukee is a poster child for the failure of vouchers, charters, and competition. The students in those schools all perform at about the same level. No sector is better.

We have no examples of genuinely competitive school markets, but the concept is widely deemed tested in Milwaukee and found ineffective. Since a small program produced small effects, choice advocates bear hug for the Milwaukee program may assure that we never will see genuine competition at work in K-12 schooling markets; a scary thought. Let’s hope this is just a Halloween scenario.

merrifield halloween

By the way, part of Ravitch’s critique rests on the wrong basis. Success or failure of school choice is not a matter of which, “sector is better;” whether current private schools, with much less money per child, perform better for similar children than current public schools. Because of our current school system, most members of both sectors are unacceptably low performing. Ravitch notes that Milwaukee’s restriction-laden small programs have not put Milwaukee outcomes ahead of the urban areas that participate in the NAEP metro area program. That comparison needs to be done more rigorously, but she may turn out to be right about the Milwaukee effects, though her overly broad interpretation of the effects is probably wrong.

The Milwaukee program “was designed to fail” and though it helped the program participants, it yielded only the small effects we could legitimately hope from a small, restriction-laden program.

Comments (13)

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  1. JD says:

    “We have no examples of genuinely competitive school markets”

    Bottom line.

    • Dewaine says:

      Right, like he said, school choice can’t be judged on such a small program.

      • Jerome says:

        Without any examples of “genuinely competitive school markets,” why would any govt want to launch a program on a large scale?

    • BHS says:

      And now that school choice advocates have repeatedly “bet the farm” on the Milwaukee outcomes — a truly lousy market experiment — the pro-establishment spin doctors are swooping in for the kill.

      That is really unfortunate.

  2. Connor says:

    Milwaukee is definitely too small of a group to prove whether or not the vouchers are effective

  3. Keith says:

    It is obvious that some changes need to be made to the program, but I think that Wisconsin is on the right path.

    • Lucas says:

      Current data would prove otherwise, but there isn’t enough to make a concrete decision

    • Dewaine says:

      Definitely school choice is good, if they can find a way to expand and make the program more heterogeneous they’ll really have something.

  4. Rudy says:

    “Surveys of parents of voucher users have repeatedly shown them to be very pleased with the assigned public school alternative, which means the program has at least worked as an escape hatch.”

    At least it’s helping some.

  5. Mike says:

    Nice article. I do quibble with one thing. you write:

    “schools suffer few if any funding losses when students leave with a voucher”

    Because of the way Wisconsin’s education finance formula works MPS does lose funding when students leave with a voucher. Every students MPS gets to count as a member of their district generates about $10,000 in a combination of state aid and local property tax. So, a students leaves for the voucher program, MPS cannot count them, they lose $10,000 in revenue (the impact is phased in over three years). Given the size of the Milwaukee voucher program, over time this has been a pretty significant impact.

    A portion of the MPCP is funded directly through an aid reduction to MPS. MPS is able to offset that reduction with the property tax levy, so there is no negative revenue effect from that reduction.