New Study Shows Charter Schools More Cost-effective Across Seven U.S. Cities

FAYETTEVILLE, Ark., Feb. 24, 2021 /PRNewswire/ -- Charter schools are more cost-effective and yield a greater return-on-investment than traditional public schools in seven cities featured in a new report by a research team based at the University of Arkansas. "Making it Count: The Productivity of Public Charter Schools in Seven U.S. Cities" examines cost-effectiveness and return-on-investment (ROI) in Camden, Denver, Indianapolis, Shelby County (Memphis), New Orleans, San Antonio and Washington, D.C., finding that charter schools yield more learning per education dollars spent in each major city. 

Across the seven cities, on average, charter schools produce higher student achievement gains than traditional schools, as measured by the National Assessment of Educational Progress (NAEP). In reading, charters average 5.92 points higher – per $1,000 funded – than traditional schools, making charters 43 percent more cost-effective in reading. In math, charters average 6.26 points higher per $1,000 funded, making them 43 percent more cost-effective in math.

"Charter schools are proving capable of accomplishing more despite the funding disparity between charter and traditional schools reaching a record-high of 33 percent," said Patrick J. Wolf, Ph.D., Distinguished Professor and 21st Century Chair in School Choice, Department of Education Reform, University of Arkansas. "Policymakers should consider charters' success and explore legislation to invest in all students equally, regardless of whether they attend a public charter or traditional public school."

Charter schools deliver a greater ROI in all seven cities. Charters' ROI exceeds that of traditional public schools by an average of 46 percent over the course of a 13-year investment in a K-12 education. Camden ranks first, with charter schools delivering an ROI that is 139 percent greater than traditional schools, followed by Indianapolis (104 percent greater), New Orleans (66 percent greater) and Denver (59 percent greater).

The report finds that charter schools generate greater lifetime earnings per student than traditional schools. On average, each dollar invested in a student's schooling in traditional public schools yields $5.46 in lifetime earnings. That same dollar invested in a charter school student yields $8.00 in lifetime earnings. This report is second in a series of three and follows "Charter School Funding: Inequity Surges in the Cities," which found that across 18 major cities, public charter schools received 33 percent less funding compared to traditional schools.

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SOURCE University of Arkansas