How Amazon Could Help Upstate New York

One of the Thanksgiving meal discussions at my house involved Amazon’s new HQ2 and why Governor Cuomo didn’t get the company to locate its new facility in upstate New York.  And, though my argument that upstate metropolitan areas lacked technology focused labor pools of sufficient size to be seriously considered by a technology based firm creating 25,000 jobs was received with skepticism, that is one of the real difficulties that upstate metropolitan areas faced in the competition.

But, my former colleague and friend from Empire State Development, Dave Catalfamo points out that with some effort from the Cuomo Administration, some of the benefits offered by Amazon might be more widely shared.  So, I’d encourage you to read the “Put Amazon to Work” on his blog, Exiled in Albany, for some ideas.




New York’s Dysfunctional School Spending Patterns

For many years, government spending in New York State has far exceeded the national average. State and local governments in New York had the second highest per capita spending in the nation in 2013.[1]

screen-shot-2016-12-08-at-8-52-07-am

Local government spending contributes significantly to New York’s high spending levels. Local government spending in New York averages $9,800 per person – the highest spending level in the nation.

screen-shot-2016-12-08-at-8-53-54-amSchools contribute the largest amount of local spending in New York.  They account for 49% of all local spending, and 61% of local taxes.  The contribution of schools to taxes is greater than to spending because a substantial portion of county spending is for social service programs funded by the State government.

New York school spending per student is far higher than the average for the nation – 87% higher.  Spending is particularly high in the suburbs surrounding New York City.  Because of the large regional disparities in school spending levels in New York State, they are likely to exacerbate educational inequality.

School Spending In New York State

screen-shot-2016-12-08-at-8-56-48-amCompared to other states, New York State spending per pupil is very high – 87% higher than the national average, and is significantly higher than the second state — Alaska (67% higher).[2] Even compared to neighboring states in the Northeast and Midwest, New York school spending is an outlier. New York’s spending per student is 16% higher than the states with the next highest expenditures – Connecticut and New Jersey and is much higher than the average for the northeast, excluding New York State – $20,610, vs. $15,639 – a difference of 32%.  The difference between New York and the average per pupil operating spending in the Midwestern states in the group was even larger – $20,610 vs. $11,556 – a difference of 78%.

This post will examine regional variations in school spending in New York state and in neighboring states, and regional variations within New York and neighboring states.

Household Income and School Spending

screen-shot-2016-12-08-at-8-58-18-amOperating spending per student is related to median household income at the state level, with income explaining about 40% of the variation in state average per pupil operating expenditures.  Schools in states with median household incomes below the national median of $51,939[3] spent $9,549 per student on average in 2014, compared with $14,268 for those above the average.  But, New York’s school spending is much higher than would be predicted from its residents’ median income.  New York’s median household income was $58,687, 13 percent higher than the national median.  The State’s average operating spending, $20,610, was 87% higher than the national average.

Regional Variations in Education Spending

screen-shot-2016-12-08-at-9-00-49-amAbout two-thirds of New York State’s 19,500,000 residents lived in the New York metropolitan area in 2014.  In that area, there is a sharp income division between the 8.4 million residents of New York City, whose median household income is $52,737 and the 4.9 million residents of suburbs in New York State around the city, which average $89,047.  The remaining 6.3 million New York residents who live outside the New York City metropolitan area have median household incomes that are like that in New York City and in the nation, about $53,000 on average.

Per pupil spending for current operations in New York State largely reflects regional household income differences.  Per pupil spending is much higher in the New York City suburbs than elsewhere, averaging $23,680 in 2014.  Spending in New York City was $18,579, while the average for upstate metropolitan counties was $16,846.

School spending in New York City suburban counties is much higher than for the rest of the state, and far exceeds per pupil expenditures measured at the state level outside New York State.   Expenditures in New York City, and in areas outside the New York City metropolitan area are lower, but are like those in the states with the highest spending levels in the region – Connecticut and New Jersey, and significantly higher than the Northeast median of $15,639 and the Midwest rust belt median of $11,556.

Cities and Suburbs – Income Disparities
screen-shot-2016-12-08-at-9-04-33-amTo understand spending differences between regions within New York State and areas outside the State, it is useful to look at per pupil spending within the major metropolitan areas in neighboring states, and outside those areas.  This is so because median incomes in metropolitan areas like New York City, Boston, and Philadelphia are significantly higher than in the rest of the states where they are located.  By comparing spending within and outside those areas, we can get a better understanding of how school spending differs in comparable areas within New York State and outside it.

Each of the four Northeastern states examined for regional disparities showed similar patterns of median household incomes.  Central City incomes were near or below state averages, as were incomes in areas outside major metropolitan areas.  Suburbs in major metropolitan areas showed very high incomes compared to state averages and central cities.

In each of the three major metropolitan areas studied median household incomes in central cities were between 32% and 52% less than in the suburban communities around them.  Philadelphia’s median household income is very low – $37,460, which is 51% less than median household income of the surrounding suburbs.  New York City’s median household income was 41% less than the surrounding suburbs in New York State.

Regional Spending Patterns
screen-shot-2016-12-08-at-9-10-37-amThe median household income for upstate metropolitan counties was like that in areas of Pennsylvania outside the Philadelphia metropolitan area, and below those in Massachusetts and New Jersey outside major metropolitan areas.  Per student operating expenditures in upstate metropolitan counties was higher than in neighboring states, averaging $16,846 compared with 12,641 in Pennsylvania and $13,883 in Massachusetts.

Median household income in suburbs around New York city was higher ($89,000) than in New Jersey ($71,000 around Philadelphia, and $75,000 around New York City), Pennsylvania ($76,915) and Massachusetts ($80,000).  New York City suburbs’ school spending per pupil was much higher than similar areas in nearby states – averaging $23,680 compared with $17,000 in New Jersey, $13,000 in Pennsylvania and $14,810 in Massachusetts.

New York City’s median household income was near that of Boston – $52,737 vs. $54,485, but per pupil expenditures in Boston were significantly higher than in New York city – $21,567 in Boston vs. $18,579 in New York City.  Philadelphia’s median household income was much lower than New York’s or Boston’s – $37,460, and per pupil expenditures were also relatively low for the region – $13,013.

The Impact of Disadvantaged Students on City Schools

Academic studies have consistently demonstrated that the cost of educating economically disadvantaged students is substantially higher than those from more affluent backgrounds.  For example, William Duncombe and John Yinger[4] of the Maxwell School at Syracuse University estimated the additional cost of estimating poor students and those with limited English proficiency to be 111% to 215%.

screen-shot-2016-12-08-at-9-11-45-amSince city school districts have much higher percentages of economically disadvantaged students than the suburban schools around them, to successfully educate their student bodies, per pupil spending should be higher in the cities than in the suburbs.  And, in Massachusetts, that is the case – Boston schools spend 48% more per pupil than the suburban schools around them.  But in New York State, the reverse is true – suburban schools spend 22% more per student than New York City schools.

Suburban areas around New York City, Philadelphia and Boston have significantly higher median incomes than those in the remainder of the states within which they are located.  In Massachusetts and Pennsylvania, per capita operating spending differs little from the suburbs of major cities to areas outside those metropolitan areas.  But in New York State, New York City metropolitan suburban school spending per student is far higher than in the remainder of the state.  Overall, there is substantially more regional spending inequality between suburban areas and New York City and the rest of the state than in similar areas in other states.

Implications

Overall, school operating spending per student in New York State is substantially higher than in neighboring Northeast states, and in the rust belt states of the Midwest.  Not surprisingly, the contrasts between New York’s high school spending levels are greater compared to schools in places like Ohio, Michigan, Indiana and Illinois than they are with New York’s immediate neighbors, like Massachusetts, Connecticut, Pennsylvania and New Jersey. When the State is broken down into regions – New York City, the suburbs in the New York Metropolitan area, and the rest of the state, only New York City shows spending levels that aren’t out of line with comparable regional entities.

The high spending levels found in New York State and its regions cannot be explained by differences in median household incomes, which are small compared with locations outside the state.   New York’s per student operating costs are 32% higher than the average of other Northeast states, and 78% higher than Midwest rust belt state.  Yet, New York’s median household income is significantly lower than some of its neighboring states, including New Jersey, where the median household income is 23% higher than in New York and in Massachusetts, where the median household income is 16% higher.

At the same time, New York has larger, regional variations in per pupil school spending that appear to exacerbate educational inequalities.  While the costs of meeting educational needs of students in districts with high concentrations of disadvantaged students are substantially higher than those in places with few of these students, wealthy New York City suburbs spend far more per student than New York City or other parts of the state. These large differences are not found in other nearby states.

[1] State and Local Finance Initiative – Data Query System:  http://slfdqs.taxpolicycenter.org/pages.cfm

[2] Source: U. S. Census Bureau:

http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=SSF_2014_00A08&prodType=table

[3] In 2014.

[4] William D. Duncombe and John Yinger, “How Much More Does a Disadvantaged Student Cost?”  (2004) Center for Policy Research, Maxwell School of Citizenship and Public Affairs, Syracuse University. Paper 103.




Government Policies and Job Growth in New York State and the Rust Belt

A recent Washington Post article, “As senator, Clinton promised 200,000 jobs in Upstate New York. Her efforts fell flat.”[1] points out that during Senator Clinton’s tenure between 2001 and 2009, Upstate New York saw job growth of only 0.2%, far from what Clinton claimed could be achieved.  While the article neglects to point out that the nation as a whole actually lost jobs during the period, since Clinton’s term ended near the low point of the recession of 2008-2009, it is clear that her claim was unfounded.

But, Senator Clinton’s emphasis on economic development and job creation is not unique.  Politicians in New York state and elsewhere regularly claim that their policies lead to job creation, often using statistics to tout their arguments.  In 1994, a significant element of Governor George Pataki’s first campaign for Governor focused on his claim that the state’s loss of jobs in the period immediately prior to the campaign was a result of Governor Mario Cuomo’s tax and regulatory policies.  Governor Pataki was fortunate, initially, because following the recession that took place in the early 1990’s, the national economy, and New York’s, improved.  Each month for the first five years of Pataki’s terms of office, his Administration pointed to the creation of thousands of jobs in New York State.

Then, in 2000, the nation again entered recession, which was exacerbated by the 9/11 attack on the World Trade Center. Not surprisingly, New York stopped seeing job growth, and the frequent press releases ceased.

More recently we have seen Governor Andrew Cuomo point to continued job growth during his administration.  In his 2016 State of the State speech, the Governor said, “We limited the state’s new spending to less than 2% a year. We passed a 2% property tax cap that has brought welcome relief to the citizens of our state and we have cut income, corporate and estate taxes. In total, we have reduced the tax burden on New Yorkers by $114 billion dollars. Why is that important? Because reducing taxes is part of our strategy to create jobs.”

During Governor Cuomo’s administration, like the first years of Governor Pataki’s administration, New York State has seen significant job growth.  But can governors or senators rightfully take credit for employment growth during their administrations?  Is New York’s relative job creation performance primarily the result of State and local tax and spending policy?  This post will examine patterns of job growth in New York, and will attempt to provide some answers.

Employment Change in New York State and the Nation

Many analyses of employment change focus on comparisons between New York State and the national average.  Between 1990 and 2015, private sector employment grew by 18.7 percent, compared with 33.5% for the nation (note, data in this report, unless otherwise noted, is from the U. S. Department of Labor, Bureau of Labor Statistics, Current Employment Statistics).  When New York is broken into regions – the New York City metropolitan region, and the rest of the state (Upstate) – there is a considerable difference in performance.  New York metropolitan employment grew by 24.5%, while Upstate employment grew by 6.1%.

NYS V US

 

But, a closer examination of the state’s performance shows significant variations in performance across different economic cycles.  Since 1990, the nation has experienced three significant growth periods, broken by recessions in 1990-1992, 2000-2002, and 2007-2009.  In the first growth period, 1992-2000, New York’s performance lagged the nation’s – private sector employment in the state as a whole grew by 15.2%, compared with 23.5% for the nation.  The difference in performance between upstate New York and the New York metropolitan area was substantial – downstate employment grew by 18.2%, while upstate job growth was 8.2%.

Percent Employment Change  – 1990-2015
    United States New York NYC Metro Upstate
 Recession   1990-1992  -0.08% -5.24% -6.84% -1.83%
 Growth   1992-2000  23.52% 15.18% 18.70% 8.06%
 Recession   2000-2002  -2.55% -4.38% -4.56% -3.97%
 Growth   2002-2007 6.39% 5.10% 6.43% 2.14%
 Recession   2007-2009  -7.54% -3.97% -4.04% -3.81%
 Growth   2009-2015 12.88% 12.65% 15.54% 6.00%

During the second growth period – from 2002-2007, New York’s performance again lagged the nation’s, but by significantly less than in the 1990’s.  Nationally, private sector employment grew by 6.4% compared with 5.1% for New York State.  Employment in the New York portion of the New York metropolitan area grew by 6.4%, which was greater than the national growth, while upstate employment grew by only 2.1%.

During the third growth period, from 2009-2015, private sector job growth in New York State about equaled the growth in the nation – 12.7% in New York vs 12.9% in the nation.  Growth in the New York portion of the New York Metropolitan area exceeded the nation’s – 15.54%, while that in upstate New York was again sub-par, at 6%.

New York Compared to Rust Belt States

Population growth in the United States has continued to shift south and west.  That factor alone contributes to regional variations in employment change.  Additionally, regions vary in “industry mix,” the relative proportions of their populations employed in different industries.  Given the historic importance of manufacturing in the rust belt, states in the Northeast and Midwest have suffered more than the rest of the nation.  For thirty years, manufacturing employment was stayed constant, at 18 million jobs, as service employment grew.  But, the decade from 2000 to 2010 saw one in every three manufacturing jobs disappear in the United States – from 17.3 million to 11.5 million.[2]

640

Not surprisingly, employment growth in rust belt states in the first decade of this century reflected the weak performance of the manufacturing sector.  Even before the great recession of 2007-2009 rust belt states saw little or no private sector job growth.  For the rust belt, both the decade between 1990 and 2000 and that between 2010 and today saw much better economic performance.

rustbelt2

Employment Change in Rust Belt States – 1990-2015

 

 

Illinois Indiana Massachusetts  Michigan New York Ohio Pennsylvania
1990-1992 -0.18% 2.45% -3.93% 0.81% -5.26% -0.34% -1.19%
1992-2000 15.78% 17.93% 21.10% 20.55% 14.56% 17.18% 13.50%
2000-2007 -1.62% -1.04% -2.91% -11.85% 0.52% -5.22% 1.46%
2007-2009 -9.09% -10.31% -5.11% -12.44% -4.48% -9.78% -5.55%
2009-2015 9.00% 13.41% 11.50% 14.45% 12.73% 10.91% 7.67%

State and Local Tax Policy and Job Creation

Does the data support the argument that state economic performance is related to tax policy?  We have often seen arguments that New York, as a relatively high taxed state, is at a disadvantage to regional competitors with lower tax burdens.  The data shows that some states with relatively high tax burdens – Massachusetts and New York – did better than states with significantly lower burdens – Michigan and Ohio, for example. (source -State & Local Government Finance Data Query System. http://slfdqs.taxpolicycenter.org/pages.cfm. The Urban Institute-Brookings Institution Tax Policy Center. Data from U.S. Census Bureau, Annual Survey of State and Local Government Finances, Government Finances, Volume 4, and Census of Governments (1977-2013)).  It also shows that the relative performance of states varied from period to period.  For example, Michigan was one of the strongest performers in the rust belt from 1992 to 2000, but was among the weakest in the recessions of 2000-2002 and 2007 to 2009.

State and Local Taxes Per Capita

Region and State 2013
United States ……………………………………………………………………… $4,599
Massachusetts……………………………………………………………………… $5,723
New York……………………………………………………………………… $8,047
Pennsylvania……………………………………………………………………… $4,627
Illinois……………………………………………………………………… $5,374
Indiana……………………………………………………………………… $3,793
Michigan……………………………………………………………………… $3,750
Ohio……………………………………………………………………… $4,275

The Upstate Downstate Divide

For the past half century, Upstate New York has consistently grown more slowly than downstate, largely because of its historical dependence on manufacturing.  Even so, the chart below shows that there have been significant differences in private sector employment growth between New York’s metropolitan areas.  The New York City metropolitan area had the greatest employment growth – more than 25% – among those studied in New York State between 1990-2015.  The Albany Schenectady Troy metropolitan area was second, with about 20% private sector job growth.

NY Metros Jobs2

 

But other metropolitan areas upstate had little private sector employment growth, or in some cases, losses.  Rochester’s employment grew by about 5%, and Buffalo’s by 3%. Binghamton’s employment declined by more than 15% during the period.

The job creation performance of New York metropolitan areas compared to other metropolitan areas in the rust belt varied substantially during different periods of growth and recession, even within relatively short time periods.  Relative to other rust belt metropolitan areas, New York metropolitan areas showed the weakest performance in the 1990-1992 recession, and the strongest in the 2007-2009 recession.  These kinds of shifts can reflect the effects of differing economic environments as they relate to metropolitan areas’ industrial bases.  For example, in 2007-2009,  metropolitan areas in Michigan, highly dependent on the auto industry, were particularly hard hit while New York’s metropolitan areas generally did relatively well.  Syracuse and Buffalo’s performance was weak between 1990 and 2000, but did relatively well between 2000 and 2009.

upstate employment change rank

Is the large variation in private sector employment change between metropolitan areas in New York State found in other states?  A look at employment change in other rust belt states shows that it is.

Ohio

Ohio Employment

Michigan

michigan

Pennsylvania

pennsylvania

The differences in employment change between cities within each state were substantially larger than those between states.  For example, Columbus, Ohio metropolitan area private sector employment grew more than 40% between 1990 and 2015, while Youngstown saw a decline of nearly 10%.  In Michigan, Grand Rapids private sector employment grew by more than 40%, while Flint’s dropped by nearly 20%.  The high level of dispersion between the economic performance of individual cities within states points to the fact that in these historically relatively undiversified metropolitan areas, the performance of a dominant industry or company can significantly affect metropolitan area private sector employment change.  Both Detroit and Flint suffered signficantly from the woes of the domestic auto industry, while the Rochester area saw Eastman Kodak employment decrease from nearly 50,000 in 1988 to a small fraction of that today.

Implications

There is clear evidence that federal policies, whether relating to labor and environmental regulations, taxes, trade, or the use of fiscal and monetary policy, can have a significant impact on corporate decision making and job growth.  But, former Senator Clinton’s claims about growing the upstate economy foundered on several realities.  First, the Senator failed to recognize that the region’s job creation would largely depend on national economic conditions.  When the national economy contracted from 2007 to 2009, any chance that 200,000 jobs would be created in upstate New York disappeared.  And, it must be recognized that  as a junior senator in a body of 100 members, Senator Clinton’s influence on federal economic policy was very limited.

Policy claims about employment change in New York often center around the notion that New York’s high taxes have retarded the state’s growth.  These claims are rooted in historical experience.  Beginning in the 1960’s New York State began to see its manufacturing base erode, as textile manufacturers, appliance makers and others sought locations with lower labor costs and taxes, and easier regulatory policies.

But it is important to remember that even then, other factors influenced location decisions.  While some people and businesses moved south and west for lower living costs, quality of life was a factor as well, probably a more important one than tax costs.  People chose to locate in the sunbelt to avoid cold winters and snow, and to access new opportunities found in these areas. As the nation’s population grew in the South and West, New York and other rust belt states were no longer as competitive as locations to serve national markets as they had been.  Metropolitan areas in the rust belt stagnated as areas in the South and West grew.  Areas that were heavily dependent on manufacturing saw  the greatest losses.

The data shows that New York’s employment change over the past 25 years has been similar to that in other rust belt states.  The relatively small differences in performance at the state level do not show an association with state and local tax levels.  There were  large differences in relative job creation performance between metropolitan areas within states overall, and significant variations in the relative performance of metropolitan areas over relatively short time periods.

Both of these findings are inconsistent with the argument that state and local tax differences are a primary explanation of state economic performance, since state and local tax burdens within states do not significantly differ, and New York’s state and local tax burden relative to other rust belt states has not shifted significantly over time.  If tax levels were a significant factor influencing job growth, we would expect to find more consistent patterns of performance within states  and across time periods, and differences in job growth between states that would be consistent with differing tax burdens.  Instead, the data points to the fact that job creation in metropolitan areas depends mostly on their industry mix – the performance of the companies within the industries that make up their economies.

These findings reflect the fact that today, state and local tax costs are a very small percentage of total firm operating costs, and that differences between states are even smaller.  In earlier research, based on data from the Tax Foundation,  I found that state and local taxes amounted to less than 4% of business operating costs (less than 2% for manufacturing businesses), on average, and that differences between New York  taxes and  taxes in other states were less than 2% of operating costs. These relatively small differences pale compared with the large differences in labor costs between locations in the United States and in low wage countries.

One study, by Professor Peter Navarro, estimated that differences in labor costs between the United States and China could amount to 17% of the cost of production – more than ten times the impact of state and local taxes on manufacturing operating costs.  For manufacturers, the large differences in labor costs and the growth of global markets have led to the movement of manufacturing operations to locations outside the United States.

While New Yorkers might legitimately question whether the services they receive are good enough to justify paying state and local taxes that are 80% higher than the average for the nation, and substantially above the average for the rust belt, the data does not support the notion that high taxes have hurt employment levels in New York State.

________________________________________________________

Metropolitan areas included in rust belt comparison:  Illinois:  Champaign-Urbana, Chicago, Peoria, Rockford, Springfield; Indiana:  Elkhart, Evansville, Fort Wayne, Gary, Indianapolis; Massachusetts:  Boston, Springfield, Worcester; Michigan:  Ann Arbor, Detroit, Flint, Grand Rapids, Kalamazoo, Lansing; New York:  Albany-Schenectady-Troy, Binghamton, Buffalo-Niagara Falls, New York City, Rochester, Syracuse, Utica; Ohio:  Akron, Canton, Cincinnati, Cleveland, Columbus, Dayton, Toledo, Youngstown; Pennsylvania:  Allentown-Bethlehem-Easton, Erie, Harrisburg, Lancaster, Philadelphia, Pittsburgh, Reading, Scranton-Wilkes-Barre, York.

[1] “As senator, Clinton promised 200,000 jobs in Upstate New York. Her efforts fell flat.” Jerry Markon, Washington Post, August 7, 2016.

[2] Economic Policy Institute, “The Manufacturing Footprint and the Importance of U. S. Manufacturing Jobs,” Robert E. Scott.  January 22, 2015.  http://www.epi.org/publication/the-manufacturing-footprint-and-the-importance-of-u-s-manufacturing-jobs/

 




Can Charter Schools break the Poverty-Poor Student Performance Link?

In an earlier post, I argued that school based solutions to the problem of the poor performance of students in central city schools were not likely to succeed because they ignored the impact of the concentration of disadvantaged students on student achievement.  The data showed that 79% of the variation in performance in school performance in upstate New York metropolitan areas was related to the concentration of economically disadvantaged students within them.

Discussions about the benefits of charter schools tend to be heated – inflamed by ideological differences.  But whatever one’s feelings are about the virtues of preserving public education, or of competition in improving educational opportunity, before making judgements, we should examine the available data about their effectiveness.

At the outset, it should be noted that evaluating the true impact of charter schools is difficult.  Ideally, the performance of charter and public schools should be compared by selecting and assigning students at random and following their progress over a period of years.  But, in reality, students in charter schools are not selected at random, and matched samples of public school students are not available for comparison. Published analyses on the subject have pointed out the need to adjust performance comparisons of students at public and charter schools for selection bias, because charter school students are to a large degree self-selected.

Where competent analyses comparing charter and public schools have been done, the findings have been mixed. One review of the available studies concluded:

“Taken in the aggregate, the empirical evidence to date leads one to conclude that we do not have definitive knowledge about the impacts of public charter schools on students and schools. But in reviewing the existing evidence, one is also struck by the fact that the impacts of charter schools appear to be very contextual. Some public charter schools are better than others. Some are very successful in meeting student needs, and others are not very successful…. Consequently, the impacts of public charter schools should not be painted with one broad brush stroke. Each should be judged on its own evidence and performance.”

Other studies  have found significant advantages for charter schools in central cities. Atila Abdulkadiroglu, Joshua Angrist, Susan Dynarski, Thomas J. Kane and Parag Pathak, in “Accountability and Flexibility in Public Schools: Evidence from Boston’s Charters and Pilots” found:

“A consistent pattern has emerged from this research. In urban areas, where students are overwhelmingly low-achieving, poor and nonwhite, charter schools tend to do better than other public schools in improving student achievement. By contrast, outside of urban areas, where students tend to be white and middle class, charters do no better and sometimes do worse than public schools.”

My research is based on a reanalysis of state education data on the performance of students on the 2015 Statewide Student Assessment.  It cannot provide a controlled analysis of the performance of charter school students, compared with those in public schools.  For that reason, the data available to me cannot produce conclusive evidence about the effectiveness of charter schools.

Because publicly available data is cross-sectional, it provides information about the performance of students at a given point in time, but unlike longitudinal studies, it does not directly measure their gains over a year or years.  For that reason, when a  cross-sectional study finds out-performance, or under-performance, there is the danger of making an attribution error, because we don’t know whether the out-performance or under-performance was a characteristic of the student population that was unrelated to the effectiveness of the schools being evaluated.  For example, the students at out-performing schools might have characteristics related to their selection that would predispose them to perform better than other students.

With those limitations in mind, it is worth looking at the New York State Education Department data on student performance from the 2015 Statewide Student Assessment, controlling for the concentration of poverty in schools, to see whether students at charter schools do significantly better than those at public schools with similar concentrations of disadvantaged students.  The chart below shows the performance of students in public and charter schools in all counties in metropolitan areas, except for the City of New York:

Public Charter Outside NYC

Note that data was available for only 33 charter schools outside New York City, so conclusions from this group of schools must be regarded as tentative.  Still, a few things stand out.  First, the performance of charter schools was quite varied – several charter schools were among the worst performers compared to schools with similar concentrations of disadvantaged students, while a number of others, particularly those with high concentrations of disadvantaged students performed better.  Second, for charter schools, unlike public schools, student performance was not related to the concentration of poverty.

As a group, students at charter schools did slightly better than at public schools with the same concentrations of disadvantaged students. However, the fact that 24% (8 of 33) schools exceeded the percent of students predicted to pass by 20% or more, based on the concentration of poor students, is significant.  Only 1.9% of public schools outside New York City had student performance reaching that level.   And, as Abdulkadiroglu, et. al. found, the benefit from charter schools was most significant for students in schools with high concentrations of poor students.

The performance of the better charter schools in urban counties outside New York City was significantly better than average schools with high concentrations of disadvantaged students, but not as good as at schools with few poor students.  Most of the better performing charter schools had about 40% of students passing the Statewide Assessment, compared with as many as 60% in schools with few disadvantaged students.

School Performance in New York City

The concentration of disadvantaged students in New York City schools is associated with 52% of the variation in student performance between the schools.  Compared to public schools in urban counties outside New York City economic disadvantage is a less powerful predictor of student performance in City schools – 52% vs. 79%.  For charter schools, the relationship between the concentration of poverty and student performance was very weak – explaining only 8% of the difference in student performance.  As with other counties, the performance of charter schools was quite heterogeneous. Students at charter schools in New York City as a group did better than those at public schools with similar concentrations of disadvantaged students.  At the same time, a number of Charter schools performed less well than the average of public schools with the same concentration of poor students.

The weaker relationship between the concentration of poverty and student performance in New York City schools appears to be in part a consequence of the city’s policy of creating specialized schools with selective admission criteria.  For example, the Medgar Evers College Preparatory School includes questions about student performance on the Statewide assessment in its application form.  Another example is the TAG Young Scholars School, which describes its admission policy this way:  “Prospective students must be tested by The New York City Department of Education to determine whether they qualify for a seat in one of the City’s Gifted and Talented programs.” Note that while charter schools often use lotteries to select students, they are not permitted to use test performance as a selection criterion.

These selective public schools raise the issue of causal attribution, since unlike schools that do not choose students based on test scores, it is likely that student bodies enter the selective public schools at higher levels of performance than students at other public and charter schools, and that their better performance may primarily be a result of selection criteria, rather than teaching at the schools.

Public Charter NYC

Some charter schools and public schools in New York City did as well as schools with low percentages of disadvantaged students.  Some of the best performing public schools with high concentrations of disadvantaged students use test performance as one criterion for admission.  Since charter schools are not permitted to exclusively serve high performing populations, the performance of the best charter schools is more remarkable.  At 34 of 148 (23%) of charter schools, 20% or more students than were expected to pass based on the concentration of disadvantaged students passed the statewide assessment. Among public schools in New York City, including those that have selective admissions, 8.9% of schools exceeded their predicted performance level by 20% or more.

While this data cannot prove that the excellent performance of some charter schools was the result of the schools themselves, rather than some other factor, it is consistent with studies that have shown charter schools to be advantageous for disadvantaged students in central cities.

Implications

Much of the discussion about the performance of schools, and how to improve outcomes, has focused on the common core and its testing requirements.  The purpose of these requirements was to provide a universal set of assessment tools that would provide comparable data about student progress across systems.

The results of the testing have been disappointing to many, since, as the figures above show, large percentages of students did not achieve passing grades.  For example, Governor Cuomo’s 2015 The State of New York’s Failing Schools report stated, “It is incongruous that 99% of teachers were rated effective, while only 35.8 percent of our students are proficient in math and 31.4 percent in English language arts. How can so many of our teachers be succeeding when so many of our students are struggling?”

Governor Cuomo’s proposal to improve student performance included the creation of a teacher evaluation system that relied more heavily (50%) on the performance of students in standardized tests, a process to make it easier to remove substandard teachers, and a process to place under-performing schools in receivership.  Several of the proposals have problems.  Teacher evaluation systems that rely heavily on the progress of students on standardized tests suffer from statistical defects that result in low reliability of results – a subject for a future blog post.  The process for identifying under-performing schools does not effectively identify schools that are under-performing relative to the concentration of students in poverty within them.

Most significantly, by focusing almost exclusively on accountability for under performing teachers and schools, the proposal does not offer a strategy for overall improvement of New York’s schools.  Accountability focused methods focus on remedying or removing the worst five or ten percent of schools and teachers in the system, but do nothing to help the great majority achieve better results.

If New York’s education system is to make strides in improving student outcomes, it must encourage schools and teachers to adopt known classroom teaching strategies and effective curriculum choices that have the potential to improve overall outcomes.  Since a significant number of charter schools have achieved excellent student outcomes, it would be helpful if the strategies they use could be considered for adoption in schools that do not perform well.  The state should focus on finding ways to encourage the use of effective strategies, by disseminating information and incentivizing their adoption.

Considerable research has been done on the strategies employed by effective charter schools in improving student performance.  For example, “Getting Beneath the Veil of Effective Schools: Evidence from New York City,” by Will Dobbie and Roland G. Fryer of Harvard University found that:  “traditionally collected input measures – class size, per pupil expenditure, the fraction of teachers with no certification, and the fraction of teachers with an advanced degree – are not correlated with school effectiveness.  In stark contrast…an index of five policies…explains approximately 45% of the variation in school effectiveness.”  They are consistent with the approaches used by “no excuses” model charter schools that emphasize selective teacher hiring, extensive teacher feedback, increased instructional time, and a focus on discipline and academic achievement.

For most schools in cities with high concentrations of disadvantaged students in central cities, academic performance remains poor. In some of these schools less than 10% of students received passing grades on the statewide assessment, and the overwhelming majority of schools with concentrations of disadvantaged students of 90% or more had less than 20% of students passing.

But almost one quarter of charter schools and a few public schools have broken the link between poverty and poor school performance.  At these schools, more than 40% of students passed the statewide assessment, despite very high concentrations of poverty within them.

Accountability based approaches aimed at weeding out ineffective teachers, or taking control of schools from boards of education will benefit only a small minority of students statewide.  Instead, we should focus on making use of what works in improving student performance at the best charter schools, encouraging poor performing schools to adopt effective techniques.