Press Release

Charter Schools Prove More Cost-Effective According to New Research On Eight Cities
Report finds charters more productive than traditional schools in first national study examining cost-effectiveness and return-on-investment at the city level

Contact: Jason Mandell

Fayetteville, Ark. – Charter schools are more cost-effective and yield a greater return-on-investment than traditional public schools in eight cities featured in a new report by researchers at the University of Arkansas who specialize in the analysis of K-12 academic outcomes and school funding. Bigger Bang, Fewer Bucks? The Productivity of Charter Schools in Eight U.S. Cities is the first-ever national report to tie charter school funding to achievement at the city level.

The report examines cost-effectiveness and return-on-investment (ROI) in Atlanta, Boston, Denver, Houston, Indianapolis, New York, San Antonio and Washington, D.C., finding that charters yield more learning per education dollars spent in each city.

“Given the unfortunate reality that educational resources are limited, it is imperative that we examine which types of schooling offer society the biggest ‘bang for the buck,’” said Patrick J. Wolf, Ph. D, Distinguished Professor and 21st Century Chair in School Choice, Department of Education Reform, University of Arkansas. “In every city we studied, public charter schools deliver more impact than traditional public schools when we consider the amount of money invested in each sector.”

In the eight cities, researchers found that, on average, charter schools are 33 percent more cost-effective in math and 32 percent more cost-effective in reading. At the top of the list is Washington, D.C., where charters are 67 percent more cost-effective in reading and 68 percent more cost-effective in math.  A close second is Indianapolis, where charters are 65 percent more cost-effective in both subjects than traditional public schools. Denver is third at 27 percent more cost-effective in reading and 28 percent more cost-effective in math.

Charters also deliver a greater return-on-investment in all eight cities. Charters’ ROI exceeds that of traditional public school by an average of 38 percent over the course of a 13-year investment in a K-12 education. At the top of this list is Washington, D.C., where charters’ ROI is 85 percent greater than traditional public schools, followed by Indianapolis at 79 percent. Boston is third at 62 percent, and Denver is fourth at 32 percent.

“In these important urban environments, there is a clear productivity advantage for public charter schools,” said Corey DeAngelis, Distinguished Doctoral Fellow at the University of Arkansas and lead author of the report. “As policymakers consider which types of public schools work best and where to invest educational resources, our research indicates that charters are an especially attractive vehicle for delivering education to students productively.”

To measure cost-effectiveness and ROI, the authors matched performance data from the National Assessment of Educational Progress (NAEP) and research findings from CREDO at Stanford University with comprehensive data regarding the total funding received by schools in the public charter and traditional public school sectors.

This new report builds on findings released last year by University of Arkansas researchers showing that charter schools in major metropolitan areas receive on average $5,721 less per pupil than traditional public schools, representing a 29 percent funding inequity gap on average. That report, Charter School Funding: Inequity in the City, examined all sources of revenue including federal, state, local and non-public dollars. It found a funding discrepancy that favored traditional public schools by at least 10 percent, and in some cases found that the funding discrepancy has widened over time.

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About the University of Arkansas Department of Education Reform

The mission of the Department of Education Reform is to advance education and economic development in Arkansas and nationwide by focusing on the improvement of K-12 schools. The Department of Education  Reform is committed to producing and disseminating high-quality research that will inform policymakers, scholars, parents, teachers, administrators and the general public about policies and practices that could improve the performance of schools in Arkansas and nationwide.

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