differences autonomy included “efficiency” outcomes better generate

EXECUTIVE SUMMARY
Background: Not all public schools in Milwaukee are created equal. There are traditional Milwaukee
public schools (MPS), educating 76% of all children in Milwaukee. In addition, Milwaukee has public
charter schools that – usually – have less red-tape than traditional schools, although they are still
“public” and subject to many of the legal requirements imposed on public schools. Yet, even among
charter schools, there is significant variation. Independent public charter schools are authorized by
the City of Milwaukee or University of Wisconsin-Milwaukee 1 and have complete control over the administration
of their school. Instrumentality and non-instrumentality charters are authorized by MPS.
While non-instrumentalities have the freedom to hire their own (typically non-union) teachers, MPS
hires the teachers for instrumentalities and those teachers are generally unionized.
Funding also varies significantly between these schools 2 . Traditional MPS schools receive around
$10,261 per student while, according to state law, independent charters receive $8,075 per student.
MPS – which decides how much to fund their charters – pays non-instrumentalities around $8,075
and their instrumentalities (with union employees) $10,261. The table below highlights these differences:
School Type
Category Instrumentality
Non-
Instrumentality Independent MPS
Common Council/ MPS
Authorizer MPS
MPS
UWM
Employees MPS School School MPS
Autonomy Limited High High None
Per-Pupil Funding
(excluding federal) $10,261 $8,075 $8,075 $10,261
Our Study: Most existing research has found that public charter schools earn better outcomes than
traditional public schools. But the variations between charter schools – with different funding, autonomy,
and management styles – sets up an interesting question: which public schools produce the
best outcomes per taxpayer dollars spent? It is important to note that voucher schools are not included
in this study due to a lack of data on the socioeconimic status of these schools. To date, no study
has attempted to answer that question, i.e., to examine differences in “efficiency” between different
types of charters and traditional schools. In order to test the “efficiency” between school types, we
conducted the following two analyses.
In the first analysis, we estimate the return on investment between school types for each charter
school and traditional public school in Milwaukee. We looked at the average score of the school on
two standardized tests 3 , dividing that by the per-pupil funding for the school. This gave us an “efficiency”
score. We ranked all public schools in Milwaukee based upon their efficiency score, i.e. outcomes
per dollar spent. Data on number of children with free and reduced lunch (income less than
$44,000 for a family of four) allow us to take into account whether the school educates predominately
low-income children.
Next, in order to check the conclusions of the first analysis, we utilized econometric techniques to better
control for other important variables, such as demographics and socioeconomic status. We generate
the estimated effect of each school type on test scores, and then divide that effect by the per-pupil
funding in the school-type to generate an efficiency score for each type of school. We then compare
these scores through a difference-of-means test.
Bang for the Buck
1