Measuring the Effect of School Choice on Economic Outcomes

Economists define school quality in three ways: resource-based, environment-based and match-based. The resource-based view proposes that school quality can be measured by tangible resources, such as student teacher ratios, term length and teacher salaries. In a 1992 study of the return to education for men born between 1920 and 1949, economists David Card and Alan Krueger found that those educated in public schools with more teachers per student, longer average term lengths, higher teacher salaries, better-educated teachers and more female teachers earn higher economic returns to schooling. A separate 1996 study, by economists Joseph Altonji and Thomas Dunn, also supports these findings: Higher salaries for teachers and expenditures per student increase their students' wages by 10.6 percent and by 5.6 percent, respectively, upon graduation. However, these wage effects decline with additional years of schooling, implying that high school quality matters just for those who only earn a high school degree. In contrast, other studies, such as economist Julian Betts' 1995 study of white males in the National Longitudinal Survey of Youth, show that traditional measures of school quality-class size, expenditures, teachers' salaries and teachers' level of education-are not significantly related to earnings. Although these measurable qualities may matter, others argue that a school's environment contributes to students' academic and economic outcomes more than its resources.