Van Schoales is executive director of A-Plus Denver, an education advocacy organization.
Some of you may have seen an interesting article this week in Education Week about a recent study on the impact of Virginia Beach City School District on the economic development of the region. The study performed by a North Carolina State economics professor, Dr. Michael Walden concluded that Virginia Beach taxpayers could expect to get a 53 percent return on investment for every dollar spent for the school district with the current level of student results.
I’ve sent a few notes to other national experts with strong economics backgrounds to get their take on the study but would also love to hear from any here about the value and validity of the study.
While it is clear that from a myriad of studies that high-quality education (and a quality B.A.) has enormous returns for an individual and larger community, I have to say I was bit surprised by how large the return was for Virginia Beach…53 percent! If true, I felt a little better about the huge sum I’m shelling out for my daughter’s fancy B.A. I would like to know what the time frame is for the return (couldn’t find it in the study) and how this compares to other potential investments. It seems very high to me.
Unfortunately, the study did not include any college success data; it had to rely on college success projections based on GPA, graduation rates and SAT/ACT scores. These are very good proxies for college success but we also know that graduation and GPA can be inflated as we have seen in a number of districts.
In communication with Dr. Walden this morning, he admitted that this was a valid point but said that these numbers would “only account for about 2 percent of the return and not be a game changer” in terms of the results of the study.
So given all of this, it made me wonder how much of a “return on investment” Denver Public Schools (DPS) might provide given the current level of investment in the district.
How would DPS numbers compare to Virginia Beach City School District? Should we expect a greater or smaller return given DPS results and the overall economic climate of the Denver metro area?
I would hope that the Denver community (DPS and other partners) would invest some money in a similar study about Denver Public Schools before the district decides to go back to taxpayers for more funding. By the way, the cost of the study for Virginia Beach was less than $50,000.
It’s clear that while Denver taxpayers have historically been very generous to the district relative to other Colorado taxpayers, I worry that they will be more skeptical now given the dismal economy, the hammering of Proposition 103 by voters (I suspect that most voters want improvement/reform with any new investment) and the slow but measurable progress of DPS.
This sort of “return on investment” information for the district and public education should must be included as part of an informed public policy discussion on education funding in Colorado.
What do you all think?
I sent a note out to a few well-known national policy wonks for their feedback (some right and some left leaning). All so far seemed a bit skeptical of the methods given the overly rosy results of the study. Dr. Federick (Rick) Hess, one of the right leaning, free market wonks was happy for me to share his remarks below-
“Note in the write-up that only a tiny sliver of the “returns” have anything to do with the purported quality of the Virginia Beach Schools. See the four “categories” of returns that are included in the study.”
“Notice that the vast majority of the calculation seems to be simply Keynesian-style multiplier calculation (e.g. the earned dollars are spent in Virginia Beach and recirculated, by which logic you can hand the money out to dropouts or unemployed graduates and get equally awesome returns). ThIs is why I have such limited faith in the value of econometricians and economic modeling on this stuff; the whole ballgame is the assumptions you start with, plugging in the numbers is largely incidental…”
For those that are critical of the study, I’ve asked a few of them to share how they would do it. Love to hear from others of you with some expertise. I never took econ, was too busy trying to figure out the geochemistry of volcanic eruptions. Here’s Hess response on how he thought this should be done-
“The way we did it in the US Chamber report or Ulrich Boss did in the Center for American Progress Report.
“Achievement results in terms of dollars spent (e.g. NAEP points per $, graduates per $, college metric per $… if you then want to price out the value of those things, you can get a dollar return).”
BUT note that this is all framed in terms of academic impact of spending, not in terms of “community impact” (which is how the economist did it, because that’s how these guys do these things…)”
From my perspective it would be great to be able to look at both the return on investment for education programs/schools like graduates per dollar as well as for the other community investments such as when the district raises money to build schools.
Van, I think you have hit on some very interesting points, and I appreciate you sharing the responses of your colleagues regarding the quality of the research that was done. It would be tremendously advantageous to have a model where you could look at both the return on investment in terms of educational output of schools, and also what that output means in terms of economic impact on the region, thus establishing stronger links for education investment as a means of accomplishing economic development. As an Education Policy person, I know I would love to have that kind of information to back up policy discussions.
If the study is true school districts should get the best bang for their buck by focussing only on those students who have the prospect of making lots of money, which in turn will bring in lots of revenue for schools. Better ROI.