Charter Schools: Achieving Comparable Test Scores with Less Funding

Charter schools provide students with greater educational gains per dollar spent than traditional public schools (TPS). That’s the finding of a new report from University of Arkansas researchers that studied public and charter schools across nine American cities. Despite receiving far less money per pupil than TPS, students in charter schools perform better and are estimated to earn more per dollar invested in their education

“Charter schools use their funding more efficiently, achieving better short- and long-term outcomes per dollar invested, relative to” traditional public schools (TPS), the study reads. “Relative to similar TPS students, charter school students, on average, perform slightly better on standardized tests, graduate high school at higher rates, enroll in college at higher rates, and have more positive behavioral outcomes.”

In the nine cities studied by the researchers, public schools received an average of $29,168 per pupil in FY 2020. Charter schools received around 70 percent of that at only $20,230 per student. But despite this gap, students in charter schools performed several points higher on a national standardized test.

While the actual achievement gap between the average public school student and charter school student was fairly small—between 0.05 and 0.07 of a standard deviation depending on the year studied—the researchers argued that, when considering the large funding gap, this small difference is significant.

Researchers estimated that across the nine cities, for every $1 spent per pupil, public school students can expect $3.94 in lifetime earnings. But for charter schools, that number shoots up to $6.25, meaning that the return on investment for students attending charter schools is 58 percent higher than for those attending traditional public schools on average. In two of the cities studied, charter schools provided an ROI 100 percent higher than TPS. 

“Charter schools tend to demonstrate greater efficiency on both metrics of cost-effectiveness and return on investment, using fewer dollars to achieve better outcomes,” the researcher wrote. “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.”

These results are hardly surprising. While it’s long been a mantra in progressive politics that increased funding is the key to improving school performance, per-pupil spending actually has a weak relationship with academic results. 

A 2012 report from Harvard and Stanford researchers found that an additional $1,000 in per-pupil spending was “associated with an annual gain in achievement of one-tenth of 1 percent of a standard deviation,” adding that such a small amount “is of no statistical or substantive significance.”

While individual charter school performances vary, reports like this show that charters are a solid academic option—one that seems to return similar or better results as public schools using less taxpayer funding.