Study: Denver charter schools yield greater return on taxpayer investment

(The Center Square) – Denver’s charter schools are more cost effective in teaching reading and math and result in a greater return on taxpayer investment than traditional public schools, according to new research.

The study, “Still a Good Investment: Charter School Productivity in Nine Cities,” by the School Choice Demonstration Project in the Department of Education Reform at the University of Arkansas examined the productivity of publicly funded schools. In addition to using its own previous study, “Charter School Funding: Little Progress Toward Equity in the City,” it incorporated achievement data from the Center for Research on Educational Outcomes, federal National Assessment of Educational Progress data and wage data from the Bureau of Labor Statistics.

“In this report, we find that charter schools tend to demonstrate greater efficiency on both metrics of cost-effectiveness and return on investment, using fewer dollars to achieve better outcomes, relative to (traditional public schools),” the study stated.

The study found charter schools in Denver and five other cities serve a higher concentration of students in poverty than traditional public schools. Plus, there are more English language learners in Denver than in the nine other cities examined.

The study examined money spent per student in 2020 with the 2019 National Assessment of Educational Progress reading and math test scores.

For Denver’s traditional public schools, the per-student cost was $18,459, and the reading test score was 269.46, resulting in 14.6 points per $1,000 of funding. Denver’s charter schools had a 270.42 score for a 15.76 rating per $1,000 of funding and expenditures of $17,161 per pupil, a difference of 1.16 points.

In math, Denver’s traditional schools had a rating of 15.56 per $1,000 of funding compared to the charter school rating of 16.84 points per $1,000 of expenditure, a 1.28 point difference.

The study’s return-on-investment analysis calculated the estimated average lifetime earnings on the investment or average per-pupil funding for kindergarten through 12th grade. Denver’s charter schools had a 12.1% better rate of return than traditional public schools.

In the nin cities examined, researchers “estimate that, for every dollar of funding received by their school for their education, [traditional public school] students earn $3.94 in average lifetime earnings while charter school students earn $6.25 in average lifetime earnings, representing a 58% charter school advantage in rates of return.”

The researchers stated they didn’t examine why charter schools might operate more efficiently.

“This differential could be due in part to the fact that charter schools do not have the same kind of structural inefficiencies as traditional public schools,” the study said. “Charter schools may be nimbler in responding to enrollment changes, while traditional public schools face higher fixed costs. However, part of the mechanism that allows charter schools to produce better outcomes with less funding could be related to the fact that charter schools are released from some restrictions placed on public schools, which may allow them to customize the way they spend their dollars to be more efficient and achieve better outcomes for students.”