Economy Education

Children are the Losers as Education Productivity Lags Overall Economy

There has been a lot of negative talk recently about the struggling American economy. Most of us are all-too-aware of falling house prices, slowing economic growth, and the possibility of recession.

While all of us should be concerned about the short-term economic prospects for our nation’s economy, the long-term track record of the American economy is very good. Productivity has risen consistently over the years and by any objective measuring stick, Americans are living better, more fulfilling lives than ever before.

This improved standard of living is the direct result of improved productivity. The fact that we as a society are able to bring more goods and services to more people using fewer resources – human or otherwise – is a big reason that we can afford better cars, bigger, better televisions, and other things that make life richer and more comfortable.

While productivity has grown exponentially in technology-intensive areas and other “cutting edge” areas of the economy, the gains have not been shared by other areas of the economy. In fact, in his new study, “Elementary Principles of Monopoly: Government-Run Schools Get Less with More,” Rio Grande Foundation fellow Dr. Harry Messenheimer, clearly shows that K-12 education in New Mexico and Hawaii is falling behind the rest of the economy due to poor productivity.

Messenheimer uses productivity data from the Bureau of Labor Statistics (BLS) and compares it with testing data from the National Assessment of Educational Progress and setting it against data on school funding and student populations. The contrast between our relatively free economy at large and our taxpayer-financed, government operated, K-12 monopoly is stark.

Since 1992, while productivity in our broader economy has grown by 41 percent according to BLS data, productivity in New Mexico schools has fallen by 22.4 percent.

Since improved productivity means doing more with less, declining productivity means that schools are doing less while consuming more resources. Since higher productivity makes us better off, lower productivity in our schools means that students are learning less than they were just 16 years ago.

So, what is the solution? The simple answer is to make our schools more like the rest of the economy. This can mean different things, but it probably does not mean that government should both provide the service in question (education) and have a taxpayer-financed monopoly.

One indicator of just how much government controls our schools is the fact that even in programs like food stamps the government doesn’t actually grow the food. Rather, it taxes the rest of us in order to provide a benefit for those who presumably cannot afford it otherwise. Food stamps are nothing but a voucher program for food. Vouchers are viewed as a “radical, free market” proposal in the realm of education.

Many free-market reformers might prefer to see our schools change in the freewheeling, innovative image of Google, but this is probably too much of a leap given the power of teachers’ unions and the inertia that has built up in our educational system over the years. “Google” might currently be unattainable, but market forces, particularly those that give parents and children greater control over education, must be adopted if we want to see innovation that increases educational productivity.

If the very nature of our education system is not changed, our lack of educational productivity will ultimately have an effect on overall economic productivity, thus making us all poorer.

Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.

Education Research

Elementary Principles of Monopoly: Government-run Schools Get Less with More

Harry Messenheimer, PhD recently analyzed issues with education in New Mexico and the fact that the state continues to spend more and more on K-12 education, but results on the respected National Assessment of Educational Progress have failed to keep up with those of children in other states.

In a follow-up to that study, “Elementary Principles of Monopoly: Government-run Schools Get Less with More,” Messenheimer analyzes productivity in education and compares it to private sector productivity. Not surprisingly, Messenheimer discovers that the competitively-driven private sector economy is far more productive than the monopolistic government education sector. For the full text of Messenheimer’s paper, click here.


Tax Credits Needed to Improve Schools

The failures of public education both here in New Mexico and in the United States as a whole are well-documented. American students test well in fourth grade, but by eighth grade, results worsen and by high school, American kids lag behind their international peers significantly.
This is the case according to a number of international tests, most prominently the Third International Mathematics and Science Study.
Unfortunately, while American students perform poorly relative to the rest of the world, it is also well-documented that New Mexico students are in turn performing worse than their peers nationwide.
A new Rio Grande Foundation of the respected National Assessment of Educational Progress found that New Mexico students have underperformed their peers in other states to an increasing extent in tests of math, English and science since testing was begun during the 1990s.
The problems mentioned above have been a topic of some discussion for years among policymakers and business leaders.
Unfortunately, all too often, the result has been either to centralize control in Washington (No Child Left Behind) or Santa Fe (statewide funding), or to simply throw more money at the schools.
As Rio Grande Foundation scholar Harry Messenheimer, Ph.D., points out in his new paper, “The Way to Education Success in New Mexico: Breaking Free from Failed ‘Reforms,’” federal, state and local governments combine to spend more than $8,000 per pupil in New Mexico.
That is more money per student than is spent by any of our geographical neighbors. Clearly, money alone is not the solution.
So, what can New Mexico do to improve its education system? Vouchers – a system under which some tax money would be diverted from public schools to allow students to choose private schools – were proposed by former Gov. Gary Johnson and failed.
The fact is, whether they would benefit students or not, large numbers of both elected officials and voters are clearly uncomfortable with vouchers.
More importantly, those concerns come from both the left (teachers’ unions) and right (supporters of private schools).
The problem is that vouchers are viewed as government money. For backers of public schools, that means resources that could otherwise fund existing schools are diverted.
To advocates of private schools it causes fear of added government regulations and red tape. Politically, this means that vouchers are a dead letter in New Mexico.
That is one reason why the Rio Grande Foundation and increasing numbers of legislators now support the idea of education tax credits.
A system of education tax credits would allow individuals and businesses to donate money – with limits specified by the Legislature – to scholarship organizations that enable children in low income families to choose the school of their choice. Donors would receive a credit against that donation on their state taxes.
While incentives are put in place by the government, under a tax credit system there is no question that the money is private, not government money.
This has led to bipartisan support for education tax credits nationwide. Arizona, Iowa, Pennsylvania, Rhode Island and Florida have all enacted tax credit programs for education.
These programs were usually enacted on a bipartisan basis and in the cases of Arizona and Iowa, by Democratic executives.
In New Mexico, education tax credits passed the Senate last year only to die in the House. Similar legislation will be introduced in the upcoming session.
Where they have been enacted, both parents and students alike have expressed satisfaction and where adequate time has passed graduation rates have increased under tax credit programs.
While such programs tend to be small in size relative to the overall educational system, their implementation here in New Mexico would help some needy children get the help they need right away.
Such programs can also provide needed data on the efficacy of private schools and competition relative to the current system.
This is a global economy. New Mexico cannot afford to fall behind other states or other nations for long.
Educational tax credits are one way to start closing the gap.
Paul Gessing is president of the Rio Grande Foundation, a non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.

Education Tax Credits and How they May Work in New Mexico

SB 462 is a bill now moving through the New Mexico Legislature that would set up a system of tax credits to provide scholarships allowing low-income K-12 students to pick the school of their choice. This legislation has been introduced by Senator James Taylor. The credits and scholarships for children would work as follows:

  • Individual tax credits could be taken against New Mexico income tax burden. Individuals could take a $500 credit while married couples filing jointly could take a $1000 credit;
  • Businesses could take a credit against their New Mexico corporate income tax burden;
  • Businesses and individuals would donate their credited money to a scholarship organization of their choice;
  • Scholarship organizations which receive donations from taxpayers receiving the credit would be 501c3 non-profit organizations;
  • At least ninety percent of the scholarship organization’s revenue from contributions would have to be spent on educational scholarships, while all revenue from interest or investments would be spent on educational scholarships;
  • Scholarships would be granted on a random basis with preference to siblings of students already in the program, but once a student is eligible for the program, they remain eligible until they graduate or turn 21 (unless they move out of state);
  • Students would be eligible for the scholarships if their family is eligible for the federal government’s reduced-price lunch program, thus the program targets low-income students and those most likely to be in under-performing public schools.

Commentary: We Should Fund Foster Children’s Educations

Finally, the need to improve foster care in America has begun to get the attention it deserves.

ABC recently ran a prime-time special, “A Call to Action: Saving Our Children,” in which Diane Sawyer documented many of the challenges that face foster children.

In his recent farewell address to Congress, former House Majority Leader Tom DeLay, who has worked on these issues, called the “catastrophe of America’s child welfare and foster care systems . . . a national outrage, a government failure and a bipartisan embarrassment.”

The key to foster care, of course, is to prepare children to live as adults once they leave the system. When foster kids turn 18, they get two birthday presents – their independence and an end to support from the state system they’ve known all their lives.

They do get some help. Congress provides $140 million annually for state grants to provide housing subsidies, medical benefits and education or training vouchers. But for many, the challenge is too great. Experts estimate that between 12 percent and 36 percent become homeless for a time.

The problem with the state grants is that the help comes too little, too late. Problems begin earlier for foster children and become clear in their performance in school.

The National Conference of State Legislatures reports that foster children are held back a grade more often, score lower on standardized tests and have higher rates of absenteeism, tardiness and truancy than their peers. They are twice as likely as the rest of the student body to drop out before graduating, according to the American School Board Journal.

We shouldn’t be surprised to find that foster children struggle in school. Adults often expect little of them, despite studies that show they have high educational aspirations and resent the fact that more is not expected of them.

Also, most foster children move several times as they grow up. This frequently involves changing schools, which causes learning disruptions and emotional insecurity. A Columbia University survey of adults formerly in foster care found they “strongly believed they had been shifted around too much while in care, and as a result, they suffered, especially in terms of education.”

So what can be done to give foster children better educational opportunities?

Recently, Arizona legislators offered an intriguing solution: private-school scholarships for foster children. According to the Goldwater Institute, the $2.5 million program will give 500 foster children a $5,000 tuition scholarship. Republican lawmakers proposed the measure, and Arizona Gov. Janet Napolitano, a Democrat, signed it into law.

Giving scholarships to New Mexico’s estimated 2,100 foster children to allow them to attend private schools could provide a number of important benefits. It could enable some foster children to stay in the same school even if they change homes. This would allow for the development of friendships with peers and adults that are so critical to the future of displaced children. Guardians, in turn, could choose the best private school available, ensuring the children receive the best education available in that area.

Importantly, Arizona’s new scholarship program for foster children is voluntary.

Foster children who are happy with their school won’t be affected. The program would provide new opportunities only to children ill-served by their current school.

No one claims this program will cure all that ails foster children. They face so many challenges that no one program will solve them all.

But in an area of public policy, where solutions often prove elusive, Arizona lawmakers should be applauded for trying an innovative approach. It’s a good first step toward providing better educational opportunities for our most at-risk children.

Lips is an adjunct scholar at the Tijeras-based Rio Grande Foundation and a policy analyst who specializes in education issues at the Washington, D.C.-based Heritage Foundation. His Policy Brief, “Providing School Choice to New Mexico Children in Foster Care: Fostering Stability and Achievement,” can be accessed at the foundation’s Web site (


Pre-K Program Raise Taxes Without Results: Arizona’s Warning for NM

Children who start early start strong. This has become the mantra for ‘early child education’ advocates nationwide. While it is easy to agree with the statement, whether or not state-run extensive kindergarten and pre-k programs accomplish such goals is open to debate.

Like New Mexico’s pre-k program that began in the fall of 2005, most of these programs are still in their early stages, making it difficult to adequately gauge their results. The exception to this rule is Arizona, which has had full-day pre-k programs in the Phoenix area dating back to 1998.

The children that took part in those original pre-k programs were fifth graders in 2005, thus allowing the results of such programs to be quantified over an adequate time period. While advocates of the plan including Arizona Gov. Janet Napolitano have argued that “the data is simply overwhelming” that full day state sponsored kindergarten and pre-k will “reap rewards many times the financial investment we make now,” preliminary data from the program shows no long term improvements.

The Goldwater Institute in Arizona recently published a report detailing the effects of Arizona’s pilot initiative. The report called “Putting Arizona Education Reform to the Test: School Choice and Early Education Expansion” should be required reading for New Mexico policymakers as New Mexico looks to expand its own pre-k program.

While kids in the Arizona program show marked improvement in their standardized test scores through the third grade, those positive results were gone by the fifth grade. Likewise, the pre-k programs in Arizona have done nothing to better the performance of late elementary school children. Both initiatives were supposed to increase student performance, yet the modest educational gains shown early on have absolutely no staying power.

Thus, taxpayers in Arizona, not to mention those in New Mexico and many of the other states with pre-k programs, are paying millions of dollars every year for a program that may produce nothing at all. Absent strong academic gains, pre-k programs accomplish nothing other than granting more power and jobs to the government education establishment.

Of course, these groups already have tremendous power. That is a major reason why individual spending per student has increased in New Mexico and across the nation. In fact, in New Mexico, real, inflation-adjusted spending per student went up 50 percent between 1982 and 2003, currently standing at over $7000. Yet student performance has remained steady at best.

The legislation that laid the foundation for eventual adoption of a universal early education program was passed here in New Mexico during 2005, the so-called “Year of the Child.”

The next year the legislature allocated a further $8 million in recurring funds as well as $5.5 million for construction, planning, and start-up costs. Only now is the legislature looking into the feasibility of creating an “Office of School Readiness” to actually monitor pre-k programs across the state.

Before we commit millions more dollars to all-day pre-k, legislators need to make sure that we are funding better educational futures for our children, not just more jobs for unionized teachers. Otherwise, we will simply follow the same path Arizona has; another ineffective government education program that only maintains the status quo.

Our education system needs reform. The answer, at least from what we have seen in Arizona, seems not to lie with more years of schooling. Before further expanding this program, New Mexico’s legislators might want to take a look at educational choice tax credit programs that have been adopted in Arizona, Pennsylvania, and Iowa, just to name a few.

Rather than simply giving our children to New Mexico’s current, broken education system for another year and spending millions more, tax credits would allow taxpayers to ensure that some of their money is spent on giving poor children better educational choices. In the long run, innovation can solve these issues, while throwing more money at the problem will only exacerbate things.

STEPHEN FORD is a policy analyst with the Rio Grande Foundation, a non-partisan, tax-exempt research and educational organization that promotes prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.

Education Research

Providing School Choice to New Mexico Children in Foster Care: Fostering Stability and Achievement

Executive Summary

The estimated 523,000 children in foster care systems across the United States – 2,100 in New Mexico – are among the most at-risk in our society.2 For a variety of reasons, children in foster care have been removed from the homes of their birth families and placed under state care. Some children are ultimately returned to their birth family or placed for adoption. Others end up in long-term foster care. Nationally, roughly half of all foster children will spend at least one year in foster care, with 20 percent staying longer than three years.3

Research suggests that children in foster care are at far higher risk of poor life outcomes than the general society.4 Adults who were formerly in foster care are more likely to be homeless, incarcerated, and dependent on state services than the general population.5 They are also more susceptible to drug and alcohol abuse and poor physical or mental health. Young women in foster care are more likely to have early pregnancies and place their own children into the foster system.

A root cause of these problems is that foster children often have not been equipped with the necessary skills to make the difficult transition out of the foster care system and become self-sufficient adults at age 18 or 21. Attaining independence is a challenge for most adolescence, but foster children are at a far greater disadvantage, often lacking a family or social structure to rely on during difficult times.

All too often, foster children receive a substandard education. Compared to the general population, foster children have lower scores on standardized tests and higher absenteeism, tardiness, truancy, and dropout rates.6

Common problems for foster children in the classroom are instability and persistent low-expectations. Frequent out-of-home placements often lead to frequent school transfers for foster children, often leading to setbacks in classroom learning. Moreover, adults formerly in foster care surveyed about their experiences often report persistent low-expectations and a lack of quality educational opportunities in the classroom.

In 2006, Arizona lawmakers enacted a first-in-the-nation school voucher program for children in foster care.7 The program will provide $2.5 million for opportunity scholarships for children that have been placed in foster care. In all, an estimated 500 students are expected to use scholarships worth $5,000 to attend private school.

Following Arizona, New Mexico could implement a school voucher program for children in foster care. An opportunity scholarship could be made available to the estimated 2,100 foster children to attend a public, private, or charter school of choice. Opportunity Scholarships could ensure that a child could continue to attend a quality school even if he or she experiences frequent out-of-home placements. Moreover, it could provide better educational opportunities to children who otherwise could have little reason to excel in the classroom. For the many foster children who are eligible for special education services, an opportunity scholarship would help ensure that these needs are met.

Ensuring that each child in New Mexico’s foster care system receives a high-quality and stable education could have lasting benefits for both the children themselves and communities as a whole.


There are an estimated 523,000 foster care children in the United States. New Mexico has approximately 2,100 children in foster care. This paper is based on the understanding that these children require specially tailored assistance to help with the difficult transition from youth to adulthood.

Unlike their peers in traditional families, foster children often do not have an adequate safety net or social network. They are unable to rely on parents and other relatives for support during the school years and to facilitate a smooth transition out of the home and into adulthood.

Research suggests that children in foster care are among the most at-risk for poor life outcomes in our society.8 For example, research has found that adults who were formerly foster children are more likely to be homeless, unprepared for employment and limited to low-skill jobs, and dependent on welfare or Medicaid.9 Research has also found that foster care children are more likely than the general population to be convicted of crimes and incarcerated, susceptible to drug and alcohol abuse, and to have poor physical or mental health.10 Among young women formerly in foster care, there is a high rate of early pregnancy.11 Evidence suggests that being placed in foster care may be a generational cycle. Adults who were formerly foster care children are more likely to have their own children placed in foster care; nearly one in five foster care women who have children will have to place their children in foster care according to one survey.12

Early Warning Signs: Poor Performance in the Classroom

An early warning sign of these negative outcomes is found in the poor performance of foster care children in the education system. While there are no comprehensive data available on the performance of foster children, a review of the numerous research sources suggests that their performance is below that of the general population.

According to the National Conference of State Legislatures, foster children’s poor performance compared to the general population is reflected in “high rates of grade retention; lower scores on standardized tests; and higher absenteeism, tardiness, truancy and dropout rates.”13 A study published by the American School Board Journal found that “foster children often repeat a grade and are twice as likely as the rest of the population to drop out before graduation.”14 Among dropouts, “fewer foster children eventually earn their GED than non-foster dropouts.”15 According to a research synthesis published by the Child Welfare League, “Almost all of the reviewed studies of those who were in out-of-home care reveal that the subject’s average level of educational attainment is below that of other citizens of comparable age.”16

Background on Education and Foster Children

The reason for this poor performance may be found in general problems that researchers have identified in meeting the following unique educational needs and circumstances of foster care children.


Children placed in foster care often change schools as they change homes or settings. As a number of researchers have concluded, changing schools results in emotional instability as well as practical disruptions in the educational process. According to a synthesis of foster care research, “fewer placements while in care were associated with better adult functioning,” specifically – “living with fewer placements was found to be associated with better school achievement and more years of education.”17 It is not surprising, therefore, that a survey of adults who had formerly been in foster care found that, “these former foster children strongly believed that they had been shifted around too much while in foster care, and as a result, they suffered, especially in terms of education.”18

Practically, school transfers can impose gaps in the learning cycle, as children change from different classrooms and must adjust to new settings, teachers, students, and, in many cases, special services. Such changes might be dramatic compared with each prior situation. According to the Vera Institute, a non-profit group and advocacy organization in support of foster care children, “too many transfers can cause a child to disengage and give up on school.”19 The U.S. Department of Education estimates that students lose between four to six months each time they transfer to a new school.20

In addition to educational setbacks, school transfers cause emotional instability and disruption. According to Nebraska University researchers, “foster children’s social network often broke down as a result of placement disruption and the collapse of their peer relationships once they switched neighborhoods or schools.”21 Given that children in foster care already lack the stability and emotional support of a natural or adoptive family or permanent guardian, this loss of stability from their school community can be particularly damaging. Researchers and policymakers suggest that, for both practical and emotional reasons, instability and too many school transfers should be avoided.

Low Expectations and the Failure of Adult Advocacy

In 1983, a researcher surveyed 277 former foster children in New York City about their experience in foster care. The results of this survey, documented in the landmark No One Ever Asked Us report, shed light on former foster children’s opinions of their educational opportunities. The former foster care children reported that, in many cases, the foster care system failed to place a high standard on their education.22

The Vera Institute also reported that surveys of older youth in foster care revealed that these children often “have high educational aspirations, resent the fact that more is not expected of them, and would benefit from adult encouragement.”23 In many cases, the report suggested, it seems these children would have benefited from alternative educational environments that offered different and more challenging and/or individualized opportunities.

Unfortunately, some of the blame may fall on the adults who should be helping ensure that these children’s educational experience is a success. According to the Vera Institute, “too often teachers, guidance counselors, and other school staff do not expect foster children to excel in school.and few are encouraged to participate in the extra-curricular activities that are associated with higher academic achievement.”24 Likewise, the National Conference of State Legislatures found that the “lines of responsibility and accountability for the educational outcomes of children in foster care are unclear” and that often “no single person or agency ultimately is held accountable for results.”25

The Need for Life Skills Instruction

It is also important to recognize the unique needs of foster children, who, in many cases, lack the family and social network necessary to learn basic life skills. A 1990 survey of former foster care children in the San Francisco Bay Area found that the subjects in general agreed that it is “imperative that social workers put more emphasis on teaching youth life skills as well as providing more tools to secure adequate and affordable housing upon emancipation.”26 The New York City No One Ever Asked Us survey concluded that education services and preparation for independent living were two of the three factors stressed for improvement by former foster children.27

Special Education

Approximately 30 to 40 percent of all children in foster care are also in special education, a higher percentage than the general population.28 Many more foster care children may be eligible for or in need of special education services, since both the identification of and tracking of foster care children may be inadequate. It is also possible that, since foster care children often lack a consistent advocate, some children placed in foster care may be better served in mainstream classrooms.29 According to researchers of the Casey Family Program, “A review of the literature and anecdotal data from the field suggest that the stories of foster children in special education are, all too often, stories of un-served or underserved children, lost records, minimal interagency communication, and confusion over the roles of birth parents, foster parents, and social workers.”30

It stands to reason that children in foster care are at risk of being underserved by the special education system. Special education is an area in education that often requires greater parental advocacy to be effective. Children in multiple placements are at great risk of failing to have their special education needs identified in their IEP (individual education program) placed into action. Among the areas suggested for improvement in meeting the needs of foster care children are: providing more access to early intervention, greater tracking and coordination of special needs children, and empowering guardians with greater advocacy and decision-making authority.31

Cultural Sensitivities

Ethnic minority children are overrepresented in the foster care population. In 2001, 54 percent of the children in foster care were ethnic minorities.32 In many cases, ethnic minority children are placed in mixed-cultural settings. These children may possibly be at greater risk than non-minority children in the foster system. Researchers have identified providing “culturally sensitive and culturally competent” services for minority children as an important goal for our child welfare system, since they might “lessen the traumatic impact of being separated from both their families and from being in a majority culture public child welfare system.”33

Precedent for Targeted Education Aid for Foster Children:
The Federal Chafee Foster Care Independence Act

Foster care services are primarily administered at the state and local level.34 However, the federal government does provide significant funding for foster care children, approximately $7.8 billion in 2004.35 While the majority of these federal funds are dedicated to general child welfare costs, such as the cost of out-of-home placement, some of these resources are dedicated to specific education programs to encourage best practices.

In 1999, President Clinton signed into law the John Chafee Foster Care Independence Program (CFCIP) that focuses on helping children aging out of foster care acquire the necessary life skills to achieve independence in adulthood.36 This program increased funding for mandatory services for youth aging out of foster care to $140 million and, according to the Congressional Research Service, granted states “more flexibility to design programs intended to improve the transition of older foster children from state custody to independent living.”37 One eligible use under CFCIP is to allow states to award $5,000 vouchers to foster children aging out of the program who are 16 years old or older for education and job training programs at public and private institutions.

Why K-12 School Choice for Foster Children?

But the education aid offered by the Chafee Foster Care Independence Act-targeted to foster children 16 years old and older-may in many cases too late. As described in detail above, children in foster care in the K-12 education system have a number of unique needs that are different than the general school population. Providing education choice and flexibility to K-12 foster care children would help provide a more solid educational foundation that will help them better achieve academic success, social stability, and adult self-sufficiency. As described in detail below, there are a number of reasons why school choice may lead to better outcomes for foster care children.

Background on School Choice: History and Empirical Evidence

Simply defined, school choice policies allow students to use taxpayer funds that would have been spent on their education in public school to choose from among a number of schools, including public, private (sectarian or secular), or charter schools. For decades, economists and policy analysts have argued that student-centered reforms such as vouchers would benefit both participating children and the entire school system through market competition.

Today, the argument for school choice rests on more than economic theory. In all, 11 states and municipalities have enacted 14 publicly-funded school choice programs.38 Thanks to the generosity of philanthropists, tens of thousands of children have been able to experience school choice through privately-funded scholarship programs.39 The growing number of publicly and privately-funded school choice programs across America have afforded researches with ample opportunity to study the effects of school choice on outcomes such as parental satisfaction, student achievement, and public school performance. This research is surveyed below.

Across the board, research suggests that school choice reforms have a positive impact on student outcomes. For example, Columbia University scholars recently examined 35 empirical studies testing the effects of competition in the educational marketplace. Overall, they found that “a sizable majority of these studies report beneficial effects of competition across all outcomes.”40

Family Satisfaction

There is general agreement that the ability to choose a child’s school increases family’s satisfaction with that school. This common sense idea has been proven in numerous studies. For example, in 2003, the Goldwater Institute surveyed approximately 2,600 low-income families participating in Arizona School Choice Trust’s scholarship program and found that parents able to choose their child’s school were happier than those parents who were unable to choose their child’s school.41

Several other studies have reached the same conclusion.42 For example, the U.S. Department of Education’s National Household Education Survey Program also found that school choice increases parental satisfaction in a national survey of parents:

Parents whose children attended either public, chosen schools or private schools were more likely to say they were very satisfied with their children’s schools, teachers, academic standards, and order and discipline than were parents whose children attended public, assigned schools. Parents whose children attended private schools were more involved in activities at their children’s schools than were parents whose children attended public, assigned and public, chosen schools.43

Policymakers implementing a school voucher program should be confident that school choice will boost the participating family’s satisfaction.

Effect on Academic Achievement of Students Receiving Vouchers

A growing body of research also suggests that school choice programs have a positive impact on student achievement. For example, a study conducted by researchers from Harvard and Georgetown Universities and the University of Wisconsin released in 2001 found that African-American students receiving private scholarships in Ohio, New York, and Washington, D.C. scored significantly higher than their peers who remained in public schools.44 Overall, dozens of independent studies have found that school choice programs benefit the students who participate.45 For example, Dr. Jay Greene, the head of the newly endowed department of education reform at the University of Arkansas, recently examined the effects of school choice on high school graduation rates in Milwaukee and found that 64 percent of low-income students using vouchers to enroll at 10 private high schools in 1999 graduated, whereas only 36 percent of their public school peers received diplomas.46

How School Choice Could Address the Special Needs of Foster Children

As described above, research suggests that children participating in school choice programs benefit from higher academic achievement It is likely that providing foster children with vouchers to attend a chosen private or parochial school would lead to higher academic achievement or, at least, greater satisfaction.

In a sense, school choice provides children with a money-back-guarantee, since the student could always use his opportunity scholarship to transfer to a new school that affords better opportunities. In addition to academic achievement and higher satisfaction, a system of school choice could address foster children’s specific needs in a number of ways.

Fostering Stability and Building Friendships and Peer Groups

Instability caused by too many transfers from different out-of-home placements, as described earlier, is one of the biggest challenges facing foster children. As the Vera Institute recently recommended, “keeping school as a point of stability can help foster children succeed educationally and give them peers and caring adults to help them weather the changes at home.”47 An opportunity scholarship would empower a child, in many cases, to remain at the same school despite transferring to a new out-of-home placement. Assuming that the placement is in the same general geographical location, the child could in many cases continue to attend the same school. As a number of researchers have advised, providing permanency in school leads to better educational outcomes and greater emotional stability for foster children.48

Long-term Friendships

Creating a long-term relationship with a chosen school could help build a long-term sense of community for a child. A survey of alumni of the Boise Division of the Casey Family Program for children in foster care found that many of the alumni “expressed a desire to connect with other be involved in alumni activities. And a willingness to contribute to the division and to help ‘Casey kids’ currently in foster homes.”49 This suggests that a positive experience with an association or community can make a positive impact on a foster child. By helping a child remain in the same school community for a lengthy period, an opportunity scholarship could purchase an important sense of belonging and community for a foster child.

Ownership and Decision-making

A primary challenge facing foster care children in the education system is the lack of an advocate. Similarly, former foster care children have expressed frustration over a lack of control about their lives and education. By offering students vouchers and the power of being a customer shopping within the education system, an opportunity scholarship would provide foster care students a greater sense of ownership over their education and future. A system of school choice for foster care children would need to include adult guardianship and accountability (discussed in greater detail below). Nevertheless, providing foster care children with some autonomy in the process of seeking education services would likely improve the child’s experience in the system. Education providers would have an additional financial incentive to meet the students’ needs or risk losing the student’s funding, since the student and his family would have control over their education future.

Cultural Considerations

Meeting the cultural needs of ethnic minority children has been identified by researchers as an important goal in the child welfare system. Increasing flexibility in the delivery of education service may provide an opportunity to meet these cultural needs, either in choosing a child’s school or, perhaps, by allocating resources to educational, after-school or summer programs designed to help meet a child’s cultural needs. Greater flexibility through school choice will likely facilitate new opportunities to meet specific needs like cultural considerations.

Special Education and Special Needs

Since between 30 to 40 percent of the children in foster care are also in special education, it is important to consider how school choice programs have been designed to benefit children with special needs. In Florida, all of the states’ nearly 400,000 special education students are eligible to receive a school voucher to attend a private or public school of their parents’ choice.50 This year, 13,700 students are participating in the program.51 According to a survey of parents currently using McKay vouchers and parents who previously used a McKay voucher and who no longer do, Manhattan Institute researchers found that “parents are much more satisfied with their experiences in private McKay schools than they were with their experience in public schools.”52 Importantly, the survey also found that over 90 percent of the parents who left the program believe it should continue to be available to those who wish to use it.

The evidence from the McKay program suggests that offering vouchers to students in special education improves the students’ educational experience by providing the power to exercise choice and preference. Offering children in foster care similar school choice options may help solve some of the general problems identified by researchers and child advocates, such as children generally falling through the cracks of the special education system. In addition, ensuring that children remain in the same school even when they change out-of-home placement (when it is geographically possible) would also help ensure that that delivery of special education services and emotional therapy sessions are not interrupted.

Innovation: Meeting Special Needs Such as Life Skills Instruction

One of the likely benefits of providing students with school choice options is innovation within the education system. For example, in 1994, Arizona enacted what is considered the nation’s strongest charter school law. Charter schools are public schools that are operated privately instead of by a school district. Over the past decade, the number of charter schools in Arizona has grown to more than 500, and nearly 10 percent of public school children now attend a charter school because they offer unique education services, for example, schools that focus on character education, back-to-basics, or the Montessori teaching method.53

Providing an incentive or opportunity to meet the very specific needs of foster care children could possibly result in the creation of innovative instruction methods that would both benefit participating children and provide a model that other education providers could imitate. The Cato Institute reported in 2001 that the field of “edupreneurs” – or for-profit educators – has expanded to constitute approximately 10 percent of the nation’s $740 billion education industry.54 Rapid innovation occurs in nearly all aspects of human life that are open to the forces of market competition. Encouraging these edupreneurs to seek ways to provide superior education services to children in foster care could lead to a number of unforeseen innovations that may benefit children and society.

Numerous research reports and surveys of former foster children suggest that children in foster care need more life-skills preparation. Since an opportunity scholarship would empower the foster care children and their families to choose their education services, foster care children would be able to choose facilities that offer these services. Other school choice programs, including charter schools as well as vouchers, have led to the development of innovative education providers. Some schools specialize in at-risk youth; others use a Montessori method of teaching; still others specialize in international education and provide additional language training. By turning foster care students into education consumers, educational providers will have an incentive to address these important needs.

Creating an Incentive for Foster Families to Become or Remain Caregivers

Recruiting and retaining quality foster parents is one of the many challenges facing America’s foster care system. According to a research report published by the National Council of State Legislatures, “Turnover among foster parents is extremely high; some agencies lose from 30 to 50 percent of their caregivers every year.”55

One common reason cited for the drop in number of foster homes nationwide is insufficient financial incentive for parents to become foster parents. But there is evidence to suggest that other factors-such as the inability to help guide the child’s future-also contribute to foster family’s dissatisfaction. The U.S. Department of Health and Human Services surveyed foster parents who had planned to quit and found that the top reason for why they decided to quit fostering – cited by 46 percent – was “no say in the child’s future.”56 Providing students with better educational opportunities through an opportunity scholarship program could make the fostering experience more enjoyable for both adults and children, as foster families would be given the opportunity to have more say in the child’s future. It is also likely that some additional parents from the private or charter school communities may find a new incentive to become foster parents if they are confident that the foster child will receive access to a quality education.

A Proposal for New Mexico:
Opportunity Scholarships for Foster Care Children

In 2006, Arizona created a first-in-the-nation school voucher program for children in foster care. The $2.5 million will provide scholarship grants worth $5,000 a piece to an estimated 500 students who have been placed in foster care.

New Mexico could implement a similar school choice program for children in foster care. According to the National Center for Education Statistics, the average per-student expenditure in New Mexico public schools is $7,022.57 The state could offer Opportunity Scholarships worth this amount to children in foster care to attend a chosen public, private, or charter school of their choice. The funding could be used to pay for both enrollment costs as well as transportation to the chosen school. (Since high school typically costs more than elementary and middle school, the voucher amount could be tiered to pay appropriate costs at the various schooling levels.)

An Opportunity Scholarship worth approximately $7,000 would enable all children to have the opportunity to attend a high quality public or private school. This about the same amount that is provided in current school voucher programs in Cleveland, Milwaukee and Washington, D.C. The U.S. Department of Education reported in 2000 that the average private school tuition across the country was $4,689. The Cato Institute, in 2003, surveyed private schools in five metropolitan cities and found that, in each case, the median private school tuition was below $5,000. In Washington, D.C., the median private school tuition was $4,500.58 For Catholic schools in particular, tuition is typically below $4,000 for an elementary school child and less than $7,000 for a high school student.59 All of this suggests that a scholarship worth $8,000 would facilitate widespread school choice.

Moreover, if the cost of tuition and transportation is lower than the $7,000 scholarship amount, the savings could be used for other education services such as tutoring or after school development programs. Or it could also be invested in an education savings account for future use, such as higher education or job training programs. Given the unique needs of foster care children, a generous $11,000 voucher would afford the flexibility to create an education program tailored to the needs of the student.

For the foster children currently receiving special education services which typically cost more than the typical per pupil expenditure, the child’s total funding in public school could be made portable. This would ensure that children receiving costly mental and physical care are also eligible to participate in the program.


This program could be overseen by the Children Youth and Families Department of the New Mexico state government. It also could be overseen by the New Mexico State Public Education Department.

Partnering with Non-Profit Organizations

In addition-or as an alternative-the state could partner with non-government organizations such as charities to provide educational guidance for children in foster care. Non-profits and charities such as the Casey Family Programs organization nationwide have a long history of a commitment to caretaking and improving the lives of children in foster care.

Moreover, non-profit organizations across the nation have also played a key role in providing better educational opportunities for disadvantaged children. Charitable scholarships funds and private school organizations have a long-track record of providing support and guidance for at-risk children. There are many precedents of government partnering with charitable organizations to offer scholarships to disadvantaged children. For example, in 2004, Congress created the Washington D.C. Opportunity Scholarship program, awarding the non-profit Washington Scholarship Fund with the opportunity of awarding school vouchers to low-income children in the nation’s capital. A similar partnership could be created in a program for foster children in New Mexico.

Additional Considerations

Oversight, Advocacy, and Checks and Balances

One of the challenges of designing a school choice program for foster care children is this: who will have the power to choose the child’s school? Children in the foster care system are charges of the state. The state should carefully design a system of checks and balances to ensure that foster children and families make wise decisions with their education resources. A number of examples that demonstrate how such a system of check and balances can be drawn from the already existing accountability measures within the child welfare system.

One possible solution would be to create a panel of commissioners to review the foster child’s education plan for the year in the summer preceding the school year. Reviewing this plan could ensure that the Opportunity Scholarship resources would be put to good use. A proposed education plan could be developed through a cooperative process that includes the opinions of the child, the child’s designated guardian, and other mentors or caseworkers appointed to supervise the child’s well-being. Prior to the school year, the commission could hold a hearing to review the plan. (While the commission would have ultimate decision-making authority, in extreme cases these decisions could be appealed to another authority within the state’s child welfare system.) Once the plan is put into place, the state could require that the commission receive periodic updates about the child’s progress to ensure that the chosen plan is being executed.

Adoption and Placement Incentives

Policymakers should structure the opportunity scholarship program to ensure that it does not provide adverse incentives for placement and adoption. For example, it would be problematic if adoption – the goal of 22 percent of foster care children60 – was seen as a determent to a child’s schooling. In this proposal, one option would be to continue to provide the foster child a scholarship after she has been adopted, therefore enabling the child to continue with her previous schooling. Similarly, while it is unlikely that any family would seek to place their child in foster care due to the opportunity provided by a voucher program, policymakers could eliminate any incentive by offering similar school choice options to all parents or specific populations, such as students from low-income families.

Religious Considerations

Policymakers must determine whether to allow foster children in the opportunity scholarship program to attend private parochial schools. The decision presents interesting questions. Numerous programs have been designed to allow individuals to independently choose to use state funds at religious institutions, such as government subsidies for higher education or health care. However, in this case, since the state is providing a supervisory role, it may practically require the state to determine whether to choose religious instruction for the child.

On the other hand, a parochial education may be a valuable option for some children in foster care. Religious institutions have a long history in caring for orphans or parent-less children. In the case where a child in foster care has family guardians, states could consider allowing children to attend parochial schools. Policymakers should carefully weigh these considerations to determine the best program for the state’s foster care children.


New Mexico’s 2,100 children in foster care are among the most at-risk in our society. Adults who were formerly in foster care are more likely to be homeless, incarcerated, and dependent on the state than the general population. One of the primary reasons for these risks it that many foster care children do not receive a high-quality education.

Offering opportunity scholarships to the estimated 2,100 school age children in foster care to attend a chosen school could address some of the common problems plaguing the educational experience of foster care children, such as instability and persistent low expectations. Moreover, it would encourage schools to tailor education services to the unique needs of foster care children, such as the need for greater life skills and self-sufficiency training.

This program would give students scholarships worth $7,500 to attend a school of their choice – a choice that would factor in the opinions of the student, his guardians, and caseworkers. Foster children eligible for special education services would be able to utilize all of their eligible public school funding at a chosen school. By using existing education funding, this program could be created at no additional cost to the state. Over the long term, an opportunity scholarship program may actually save the state additional resources as at-risk children are given the necessary skills to become independent adults, rather than dependent on the state.

School choice policies like the opportunity scholarship program outlined in this report have been found to boost student outcomes on test scores and increase family satisfaction with their child’s education experience. It is likely that foster care children could also benefit from school choice.

Dan Lips is an Education Analyst at the Heritage Foundation,, in Washington, D.C., and a senior fellow at the Goldwater Institute, the Maryland Public Policy Institute, and the Rio Grande Foundation.

1. Much of the research and writing for this report was drawn from previous studies authored by Dan Lips on the idea of school choice for children in foster care for the Maryland Public Policy Institute (2005) and the Yankee Institute (2006).
2. “Foster Care FY1999-FY2003,” Administration for Children and Families, Department of Health and Human Services, accessed at Data as of April 2005.
3. “Foster Care National Statistics,” National Clearing House on Child Abuse and Neglect Information, U.S. Department of Health and Human Services, According to HHS, 542,000 children were in foster care as of September 30, 2001. 50 percent of these children will remain in foster care for longer than 1 year.
4. For a summary of the risk factors facing children in foster care, see: Thomas P. McDonald, et al., Assessing the Long-Term Effects of Foster Care: A Research Synthesis (Child Welfare League of America, Washington, D.C.: 1996).
5. Ibid.
6. Steve Christian, “Educating Children in Foster Care,” National Conference of State Legislatures, Children’s Policy Initiative, Washington, D.C., December 2003, available at (accessed August 29, 2005).
7. Goldwater Institute, “Four New School Choice Measures Make History,” press release, June 21, 2006, at:
8. McDonald, et al., Assessing the Long-Term Effects of Foster Care: A Research Synthesis. P41-69, 119-129.
9. Ibid. P41-69.
10. Ibid. P71-80.
11. Ibid. P125.
12. Ibid. P125.
13. Christian, “Educating Children in Foster Care,” December 2003. P.1.
14. “How You Can Create a Positive Educational Experience for the Foster Child,” Vera Institute of Justice, available online at: (accessed August 29, 2005). P.2.
15. Ibid.
16. McDonald, et al., Assessing the Long-Term Effects of Foster Care: A Research Synthesis, p. 41.
17. Ibid., p. 135.
18. Findings from Trudy Festinger, No One Ever Asked Us (Columbia University: 1984). Research cited in: Patrick A. Curtis, et al., eds, The Foster Care Crisis: Translating Research into Policy and Practice (University of Nebraska: 1999), p. 109.
19. “How You Can Create a Positive Educational Experience for the Foster Child,” Vera Institute of Justice. P.3.
20. “Foster children prone to drop out, statistics show,” Education Daily, July 27, 2005.
21. Ibid., p. 108.
22. Ibid.
23. “How You Can Create a Positive Educational Experience for the Foster Child,” Vera Institute.
24. Ibid. P.24.
25. Steve Christian, “Educating Children in Foster Care,” December 2003.
26. Curtis, et al., The Foster Care Crisis, p. 111.
27. Ibid., p. 110.
28. Claire van Windgerden, John Emerson, and Dennis Ichikawa, “Improving Special Education for Children with Disabilities in Foster Care,” Education Issue Brief, Casey Family Programs, 2002. Available at: August 29, 2005).
29. Researchers have identified systemic problems of specific populations of students being over-identified in special education. For example, see: Matthew Ladner, Christopher Hammons, “Special But Unequal: Race and Special Education,” in Rethinking Special Education for a New Century (Fordham Foundation: 2001), Chapter 5, available at: (accessed August 29, 2005).
30. Windergerden, “Improving Special Education for Children with Disabilities in Foster Care,” 2002.
31. Ibid.
32. “Foster Care National Statistics,” National Clearing House on Child Abuse and Neglect Information, U.S. Department of Health and Human Services,
33. See Anthony J. Urqquiza, et al., “The Foster Care Crisis,” Chapter 4: “Foster Care and the Special Needs of Minority Children,” p. 84-95.
34. Emilie Stoltzfus, “Child Welfare, Foster Care, and Adoption,” Congressional Research Service, April 12, 2004.
35. Ibid.
36. For an overview of the CFCIP, see Emilie Stoltzfus, “Child Welfare: the Chafee Foster Care Independence Program.”
37. Ibid.
38. Krista Kafer, “School Choice 2003: How States are Providing Greater Opportunity in Education,” Heritage Foundation, 2003. P.ix.
39. An example is the Children’s Scholarship Fund. Since 1998, the non-profit organization has awarded 67,000 private school scholarships to low-income children. For information on CSF, visit
40. Clive R. Belfield, Henry M. Levin, “Analyzing School Choice Reforms,” National Center for the Study of Privatization, Columbia University, March 2002.p.2.
41. Dan Lips, “The Impact of Tuition Scholarships on Low-Income Families: A Survey of Arizona School Choice Trust Parents,” Policy Report #187, Goldwater Institute, December 11, 2003, available at: (accessed August 29, 2005).
42. Phillip Vassalo, “More Than Grades: How School Choice Boosts Parental Satisfaction,” Cato Institute, October 27, 2000.
43. “Trends in the Use of School Choice: 1993 to 1999,” Statistical Analysis Report, National Center for Education Statistics, U.S. Department of Education, May 2003, available at (accessed August 29, 2005). P.vii.
44. William Howell, et al., “School Vouchers and Academic Performance: Results from Three Randomized Field Trials.” Journal of Policy Analysts and Management, Spring 2002.
45. Belfield and Levin, “Analyzing School Choice Reforms.”
46. Jay Greene, “Graduation Rates for Choice and Public School Students in Milwaukee,” Manhattan Institute for Policy Research, September 2004. P.2.
47. “How You Can Create a Positive Educational Experience for the Foster Child,” Vera Institute. P.3.
48. Ibid. P.10.
49. Curtis, The Foster Care Crisis, p. 113.
50. Jay Greene, Greg Forster, “Vouchers for Special Education Students: An Evaluation of Florida’s McKay Scholarship Program,” Civic Report No. 38, Manhattan Institute, June 2003. P.1.
51. Facts on school choice compiled by School Choice Wisconsin, available at: August 29, 2005).
52. Greene and Forster, “Vouchers for Special Education Students,” June 2003. P.1.
53. For background on Arizona’s experience with charter schools, visit the U.S. Department of Education’s website on charter schools:
54. Carrie Lips, “Edupreneuers: A Survey of For-Profit Education,” Policy Analysis No. 386, Cato Institute November 20, 2000.
55. Steve Christian, “Supporting and Retaining Foster Parents,” Legislative Report, Vol. No. 7, No. 11, National Conference of State Legislatures, April 2002. P.1.
56. Christian. P.2.
57. Digest of Education Statistics 2005, National Center for Education Statistics, U.S. Department of Education, Table 166.
58. David Salisbury, “Most Private Schools Aren’t Expensive,” August 29, 2003.
59. See Valerie Strauss, “Area Catholic Schools Grow, Bucking Trend,” Washington Post, August 29, 2004, p. C01.
60. Foster Care National Statistics, National Clearinghouse on Child Abuse and Neglect Information, available at: (accessed August 29, 2005). P.3.

Economy Education

Shift Burden of Financing Schools to Private Sector


The recent agreement between the Albuquerque Public Schools and the Home Builders Association of Central New Mexico was a real head-scratcher for several reasons.

After all, who gave the home builders and the school district the power to tax? Even if this action is found to be legal, a questionable proposition at best, $2,000 per new home seems rather arbitrary (the number will rise to $3,000 in the third year). What exactly are the home-buyers who will ultimately pay this new tax getting out of the deal?

Some would argue that forcing new homeowners to pay for new schools is similar to a “user fee” because new homeowners demand additional services. But, this is not the case because buyers of new homes pay the same taxes as everyone else. It is simply not fair to charge retirees (or anyone else without kids in public schools) yet another tax, simply for the “privilege” of purchasing a newly-constructed home.

Nearly as important as the fairness question is whether the schools really need the money they say they do. APS claims it needs an astounding $1.7 billion for two new high schools on the West Side and renovations to existing school buildings. Rather than simply raising taxes though, with a little creativity, APS could avoid this tax increase and transform schools into thriving community centers that can be used on weekends and during summers.

The key is to put an incentive structure in place that creates maximum benefits at a minimal cost. This can most effectively be done by shifting the burden of financing new schools to the private sector. It works like this:

# School districts ask private developers to bid on a contract to construct (or renovate) a school from start to finish.

# The district converts the cost of the project into a 20-year lease with annual rent payments equal to 85 percent of the cost of the project (based on the winning bid).

# The developer completes the school with furnishings (such as desks and chalkboards), computers, administrative offices, landscaping, and athletic facilities.

# The district effectively gains use of a school building for 15 percent less than it would cost to construct on the district’s own accord.

Private developers receive an additional bonus: They get control of the buildings and classrooms when they are not in use by the school. During evenings, weekends, and (possibly) summers, the developer may lease classrooms to for-profit trade schools and approved civic, political, or religious groups.

Projects like this have been undertaken in Florida, Nova Scotia, and Britain. APS should consider similar financing efforts both for constructing new schools and renovating existing schools.

An additional way to cut school construction costs is to exempt public school construction projects from New Mexico’s Davis-Bacon “prevailing wage” law. If the Legislature were to approve such a measure, taxpayers and school districts would likely save an additional 15 percent on school construction.

A 1995 study by the National School Boards Association demonstrated that over 60 percent of school boards found that federal or state Davis-Bacon laws had increased the cost of a recent construction project, and over half had increased as much as 20 percent.

Lastly, Albuquerque must work in concert with the governor and Legislature to better rationalize its school funding system. If East Side taxpayers refuse to pay for new schools on the West Side, perhaps the district should be split in two. And, rather than pouring taxpayer money into the construction of additional schools, perhaps money should be given to parents themselves so they can decide whether charter, private or traditional public schools are best for their child.

Throwing more money at Albuquerque’s troubled school system is not a recipe for success. Instead of abdicating their taxing authority to APS, our elected officials need to come up with innovative ways to save money.

The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.

Education Research

The Way to Education Success in New Mexico: Breaking Free from Failed Reforms

As Harry Messenheimer, PhD discusses in this article, New Mexico is spending more and more on K-12 education, but results on the respected National Assessment of Educational Progress have failed to keep up with those of children in other states. Messenheimer discusses the problem and how to fix it in this study which is available here.