Category Archives: Productivity

Roland Fryer and the Root Cause of Good Management

Screen Shot 2017-05-30 at 3.44.45 PM

Roland Fryer is one of the top education researchers in the country. His research is always thought provoking and whenever we talk I learn something.

If there’s one area Roland and I may disagree on, it’s the potential for school districts to sustainably adopt the best practices of charter schools (which Roland has been instrumental in helping us understand).

This issue is of course wrapped up in the bigger question: will the greatest value of charter schools be the birth of  innovative practices or the scaling of a better governance model?

I. Roland’s New Research: MGMT Matters

Roland just came out with a fascinating study on the importance of effective principal management.

The experimental research project was set in Houston and provided principal management training (much of it borrowed from Paul Bambrick-Santoyo of Uncommon Schools) to a treatment group of school district principals.

The researchers found:

Overall, the estimates suggest that management training was effective in year one – increasing efficiency approximately 7% — but produced precisely estimated zeros in year two. Pooling the two years produces marginally significant results that fall on the other side of significance with more conservative standard errors. Management training tends to be more effective with more flexible, stable and higher human capital principals and teachers. The most robust partitions of the data are whether a principal was employed for both years of the experiment and fidelity of implementation of the management training.

In sum: they found impressive effects with talented principals who stayed in the job for two years but no effects overall due to principal turnover and too many low human capital leaders.

II. Why Did Fryer Need to Conduct an Experiment in Houston?

Data driven instruction and teacher feedback, which were key to the intervention, are not new ideas. Bambrick wrote Leveraged Leadership in 2012. And he surely wasn’t the first to implement these management practices.

So why did Fryer need to construct an experiment to apply these sound management practices in Houston?

Why wasn’t the Houston school district applying these techniques already?

As it happens, some other researchers (Nicholas Bloom, Erik Brynjolfsson, Lucia Foster, Ron Jarmin, Megha Patnaik, Itay Saporta Eksten, John Van Reenen) just published a paper on this very subject – with the aim of trying to understand the root causes of good management practices.

III. What are the Root Causes of Good Management Practices?

It’s hard to do a controlled experiment on management practices in the private sector, so caution is warranted in interpreting the results.

The authors used survey data and business results to determine whether sound management practices are correlated to increased business success (they are), and then tried to figure out what business conditions led to better management practices.

While the methodology is inherently tricky, it did reaffirm my priors.

The researchers found:

What could cause these huge differences in management practices across establishments? We found several major factors. First, establishments in more competitive industries (measured by the Lerner index) adopt more structured management practices. Second, those in more pro-business states (proxied by states with ‘right to work’ laws, as in Holmes 1998) tend to use more structured management practices. Third, establishments with more college graduates and firms located near universities (building on the work of Moretti 2004 for identification) tended to adopt more structured management practices. Fourth, being located near a successful large new entrant (using the ‘million dollar plants’ identification strategy of Greenstone et al. 2010) is correlated with more structured management practices, likely because it allows local companies to learn about practices from these large, successful firms.

All these factors matter, but they explained less than half of the variation in management techniques, which means that many other factors matter, too. One hypothesis is that individual managers and CEOs themselves are another critical driver (e.g. Bandiera et al. 2017).

To summarize: good management practices were most often found in (1) competitive industries (2) with less restrictive labor laws (3) located near universities and (4) successful new start-ups.

I know a city educational system that meets all these conditions.

It happened to achieve some of the best student achievement results the country has recently seen.

IV. Yes And

It if it ever occurs, it will take a few decades to scale the charter sector serve the vast majority of low-income students.

For this reason, I appreciate Roland’s efforts to see if charter practices can increase achievement in districts. While I don’t think this is the long-term game, there might be short-term benefits to be had.

But if you want these achievement gains to be sustained, you have to address root causes.

And the root cause of good management is not really about intellectually understanding good management practices.

Rather, it’s about creating the enabling conditions to sustainably execute these management practices.

I believe that non-profit governance will prove to be one of the most important enabling conditions in the public education sector.

Ignoring educational productivity is immoral

I. The Morality of Productivity 

What if we knew a way to increase educational opportunity at no additional cost?

The benefits would be enormous. We could give more children the education they deserve.

And, by not having to increase educational spending, we could spend these saved tax dollars on families in need, or paying off government debt, or keeping money in the hands of working families.

Increasing educational productivity is one of the great moral issues of our time.

Unfortunately, increasing educational productivity in our country has been enormously difficult to accomplish.

II. Inequity in the City

Researchers at the University of Arkansas just published Charter School Funding: Inequity in the City.

The report finds that across 14 cities, public charter schools receive an average of $5,721 less per-pupil than traditional public schools, which equates to a 29% funding gap.

The data table below provides more detail.

Screen Shot 2017-05-11 at 3.02.01 PM

The authors do note that charters serve less special education students than traditional schools.

When controlled for special education, the results change a bit. Calculating the true costs of special education is notoriously difficult to estimate, so I view these figures as likely directionally correct but not 100% precise.

Screen Shot 2017-05-11 at 3.04.58 PMOnce special education is accounted for, two regions, Shelby Country and Houston spend more on charters than traditional schools (this is in part because philanthropy picks up some of the charter school tab).

But 10 other cities still have a +$500 or greater funding gap per student.

Glancing at these cities, it looks like the special education differential accounts for about 20-25% of the spending discrepancy.

So that original 29% funding gap is a bit high.

Let’s be generous to the traditional system and say the the true gap is closer to 20%.

III. Charter School Performance in the City

To gauge charter school performance in these cities, I looked at CREDO’s urban charter school study.

See below for a table that I crated that adds in the CREDO math and ELA effects in the last two columns.

Screen Shot 2017-05-11 at 3.31.38 PM

What do you notice?

In every city except for San Antonio, charters outperform the traditional system.

Sometimes it’s by small amounts (Atlanta), and sometimes it’s by large amounts (Boston), but in nearly every case charters outperform their traditional peers.

And while the above analysis only looks at ten or so cities, the results mirror other national studies that consistently find urban charter schools outperform traditional public schools while spending around 20% less per-pupil.

IV. What Could You do With a the Gains from Productivity?

Research indicates that charter schools can probably get better, or at least equal, results in low-income areas for 20% less cost. In New Orleans, these achievement gains held steady even when the charter sector grew to serve 95% of the students in the city, which provides some hope that these findings will stick at scale.

In a field where productivity gains are hard to come by, urban charter schools are a source of very significant productivity gains.

What, as a society, could we do with this 20% extra funding that urban charter schools could save us?

Well, we spend about $10,000 per student on public education in this country.

With a 20% savings, we could turn around and give a basic income grant of $4,000 to every family with two children.

Alternatively, we could spend money on additional social services.

Or we could put more money in the hands of taxpayers, which could help grow the economy and provide more jobs.

Any of these options, especially cash grants back to poor families, could do a lot for those in need.

This is why ignoring educational productivity is immoral.

It may not feel good to consider the educational system through a productivity lens, but to fail to do so is to hurt those who are most in need of our support.