Public Schools Need A Little Peer Pressure

During the just-concluded Presidential campaign, Bill Clinton and Bob Dole agreed that the public school system is failing to meet the education needs of poorer and middle-class children. But while the former senator believes the solution lies in vouchers or scholarships for students to attend private schools, President Clinton accepts the claim made by opponents of vouchers that greater competition to public schools would greatly weaken public education.

I believe that competition from private schools will make most public schools better, not worse. Opponents argue that vouchers and scholarships will enable private schools to get the "cream of the crop," that the better and more ambitious students would leave public schools to attend private schools. As a result, public education would be stuck mainly with students who are unruly, uninterested in learning, or mentally handicapped. However, this scenario assumes that public school performance will not improve when faced with competition from private schools.

ENCOURAGEMENT. So far, private schools have competed with one hand tied behind their back because of the subsidy from taxpayers to public schools. A voucher system would expand private schools, increase the competitive pressure on the public school system, and thus promote change.

The root cause of poor performance of public schools is not insufficient funding, since real expenditures per public-school student have more than doubled during the past 30 years. Nationally, expenditures per student come to $5,000 and in many cities, it is $9,000 to $11,000. The bad record of many public schools is usually because of a poor curriculum, lack of personal safety, and weak discipline of disruptive students that discourage kids who want to learn. The private-education sector would attract students by offering a program, including homework, discipline, and parental involvement, that is more appealing to students and their families than what has been available to them.

Since the vast majority of public school teachers and administrators are dedicated to teaching, they will try to reform the public school system if there is clear evidence that competing private schools are attracting the better students with vouchers. Moreover, public schools that are slow to change and continue to lose students will be under growing political pressure to respond to the competition. School boards and voters will cut budgets and remove principals and school administrators unless they compete for students.

RESPONSIVE. Federal Express and United Parcel Service greatly improved postal-system delivery of letters and packages by introducing speedy and reliable service. Although the U.S. Post Office lost out in the competition to deliver most packages because private companies are so much better at that, it greatly improved its delivery of Priority Mail in response to pressure from private companies.

Economist Caroline Minter Hoxby of Harvard University finds that competition from Catholic private schools and even other public schools in nearby school districts improves public school academic performance. Students from all backgrounds do better, and she does not find any evidence of cream-skimming by private schools.

Many foreign students travel long distances to attend American colleges and universities because they make up the best system of higher education. The competition among several thousand colleges and universities for students and faculty keeps all of them on their toes.

The first G.I. Bill offered scholarships to World War II veterans, giving many of them an opportunity to attend colleges they otherwise would not have been able to attend. This program also helped improve the quality of American higher education by sharply increasing competition for students. Veterans could use their scholarships to pay tuition at any college, private as well as public, that accepted them. The funds provided by the bill offset state subsidies to public institutions and forced these schools to improve in order to compete for students against private colleges on a more level playing field.

Vouchers and scholarships directed toward inner-city and other children from poorer families would help them the way the G.I. Bill helped military veterans. They would then have greater choice and would no longer have to accept a mediocre education offered by an uncompetitive public system.

Even with school vouchers many students, including good ones, would remain in the public system if these schools got better. And they will become better when faced with stiffer competition for students from the private sector.

Before it's here, it's on the Bloomberg Terminal.