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The Unintended Consequences of School Choice

In the past decade, school choice interventions have emerged as one of the most hotly debated topics in education policy worldwide. A key aim behind such interventions is to loosen the connection behind housing and school choice that exists in systems using residential proximity as a tiebreaker admissions rule for oversubscribed schools. Such systems enable more advantaged families to move closer to, and obtain places at schools, they prefer, whereas less advantaged families do not have the resources necessary to exercise such choice. Many hope that increased choice opportunities among the less advantaged coupled with alternative tiebreakers, such as lotteries, could ameliorate this fundamental inequality in the education system.

However, the effects of targeted choice interventions on school access depend fundamentally on design. Indeed, without careful design, the interventions may provide opportunities for advantaged families to manipulate the system in their favour – which in turn may thwart the goals of the policies. Research by Stephen Billings, Eric Brunner and Stephen Ross, reported in our March Research Digest,  provides a striking analysis of such unintended consequences.

Their paper, Gentrification and Failing Schools: The Unintended Consequences of School Choice under NCLBfocuses on school-choice provisions in the 2002 No Child Left Behind (NCLB) Act in America. NCLB was one of the most radical education reforms at the federal level in the US, requiring all states to administer standardised tests to identify poorly performing schools. If schools that receive federal (Title 1) funding fail to meet so-called ‘adequate yearly progress’ for two years in a row, the districts must provide their pupils with opportunities to attend non-failing schools. In practice, these opportunities have often been ensured by giving the pupils improved odds in lotteries for oversubscribed schools.

While such provisions are designed to enable pupils stuck in poor schools to attend better ones, they may also create incentives for families to move into the attendance zones of failing schools merely to take advantage of the improved odds to get in elsewhere. Indeed, theoretical evidence suggests that voucher programmes targeted to low-performing districts should induce high-income households to move to those districts to take advantage of lower house prices (partly due to lower school quality) as well as the voucher, thereby increasing housing prices and gentrification – but at the same time also reducing residential income stratification.

To test these predictions, the authors analyse data from Charlotte-Mecklenburg school district in North Carolina, investigating how house prices, homebuyer income, and school choices are affected when failing schools force districts to offer pupils residing in their attendance zones improved odds to get in to oversubscribed schools elsewhere in the district. They compare neighbourhoods bisected by recently redrawn attendance boundaries, before and after schools fail to achieve adequate yearly progress the second time.

The authors find that school failures that trigger the NCLB choice provision increase house prices, homebuyer income, and the probability of attending magnet schools – which draw pupils from different attendance zones – in the most desirable parts of the failings schools’ attendance zones. Furthermore, they find that the increase in the likelihood of attending magnet schools only applies to new residents; original residents do not benefit from the intervention in this respect. In other words, the targeted choice interventions mostly benefited more advantaged households outside the failing schools’ attendance zones – in sharp contrast to the motivations behind their introduction.

Overall, the paper clearly shows how well meaning yet poorly designed choice reforms may end up not directly benefiting the pupils they target, highlighting the importance of clear thinking around the incentives created by policymakers when implementing such reforms. At the same time, the paper also verifies the idea that even poorly-designed choice programmes may reduce residential income stratification and improve neighbourhood quality, in line with prior theoretical modelling. Other research also suggests such outcomes may benefit poorer pupils in the longer term through ‘neighbourhood effects’, suggesting that the impact of choice on residential stratification may carry indirect benefits in this sense as well. However, the extent to which such effects mitigated the unintended consequences found in the paper needs further research to be established.

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