Is School Choice a Good Investment?

Posted: Feb 04, 2013 12:10 PM

Yes, it is. In fact, according to a new study conducted by two distinguished education scholars in the District of Columbia, school choice bolsters public high school graduation rates, reduces crime, and even creates new taxpayers:

The District of Columbia Opportunity Scholarship Program (OSP) produced $2.62 in benefits for every dollar spent on it. In other words, the return on public investment for the private-school voucher program during its early years was 162 percent. …

In our study we combined the increased-graduation results from the rigorous government evaluation with the work of labor, health, and public-policy economists who have at various times estimated the value of a high-school diploma to get an overall estimate of the impact of the program. Combining the increased income and financial benefits of longevity and quality of life, a high-school diploma is worth almost $350,000 to an individual.

Because a high-school diploma makes an individual less likely to commit crimes, it therefore decreases both the costs incurred by victims of crimes and those borne by the public in administering the justice system. Coupled with the increased tax revenue made on the increased income, this yields an extra benefit for society of over $87,000 per high-school graduate.

Multiplying the number of additional graduates by the value of a high-school diploma yields a total benefit of over $183 million. Over the time of our study, the OSP cost taxpayers $70 million, so dividing the benefits by the cost yields an overall benefit-to-cost ratio of 2.62, or $2.62 for every dollar that was spent.

Programs that perform better and save money are the most sought-after of public policies. The District of Columbia Opportunity Scholarship Program was and is such a program. We see no reason why the current group of 1,584 low-income DC students participating in the program won’t realize the same benefit of higher high-school graduation rates that their predecessors did.

Given these findings, it’s hard to construct a convincing argument for why anyone, let alone the president of the United States, would oppose -- and try to de-fund -- such a successful program. Not only is the OSP and other similar voucher programs a smart investment, which over time will reduce our long-term federal deficit and grow the economy, it’s also making a real difference in the lives of inner-city children. Virtually every study ever conducted in the United States shows that students who graduate from high school lead significantly better and more productive lives. Thus, education leaders nationwide should look to our nation’s capital (never thought I’d say that in print) for innovative and groundbreaking ways to fix our broken education system.

Incidentally, one of the many reasons I dislike paying taxes is because I never know where any of it goes. Hence, the cynic in me generally assumes my tax dollars are grossly wasted on flying Washington bureaucrats around the world or on some other frivolous expenditure. But this seems to be one of those rare moments -- as a proud D.C. resident -- when the exorbitantly high taxes I give to the city are actually being put to good use. It’s a small victory, to be sure, but one I think every Beltway dweller should celebrate -- and learn more about.

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