The Study

In this paper, Doug Harris of the Michigan Department of Education and Professor David Plank, director of the Education Policy Center at MSU, promote the use of cost-effectiveness analysis in reaching more informed education policy decisions. They illustrate the value of this approach by providing comparisons between policies aimed at increasing the number of teachers (decreasing class size) with those intended to increase the ability of teachers (increased salaries).

Findings

In surveying the research, the authors find that reduced class size does produce gains in student academic achievement. But the question they pose is at what price as compared with policies designed to increase teacher ability. The authors developed a cost model based on the pool of candidates for new teaching positions, teacher salaries, and other factors. They found that it would cost $435 annually per student to move a student from the 50^th percentile to the 54^th percentile by reducing class size by five students. They then apply the same type of cost-effectiveness analysis to teacher ability. One way to increase teacher ability is to raise the standards teachers must meet in order to teach. The authors note that districts would then have to increase salaries in order to maintain the pool of qualified applicants. They then developed a model to estimate the cost of such a policy decision. They found that raising a student from the same 50^th percentile to the 54^th percentile would cost about $200 per student per year. For Harris and Plank, the results are clear. “Hiring fewer teachers with greater ability will produce greater gains at lower cost than hiring larger numbers of teachers with less ability. The short-term effect of a change in class size would almost certainly be greater, but the long-term effect would be smaller. As teachers leave the profession, higher salaries would attract better candidates for teaching positions. Over time these new teachers would have a greater impact on student performance at a lower cost.” They pointed out that the important lesson is that policy makers must have available good information from which to base sound policy decisions.  “The best apple in the barrel is not very useful if we cannot find it. Instead of reaching out and picking the first one we see, it is essential that we compare at least a handful of those that look good on the surface. The choices are not merely a matter of economics … Rather, the ability of educators to make these thorough choices will determine how much we can contribute to the education of our students.”

What It Means To You

Making good policy choices is essential, the authors point out, but sometimes policy makers are forced to make education decisions on little more than hunch or intuition. To what degree does your district and school board use cost-effectiveness analysis to make informed decisions? Could your organization or deliberations benefit from this type of careful analysis?

For More Information

Harris, D. & Plank, D. (2000). Making policy choices: Is class size reduction the best alternative? The paper is available on the Education Policy Center’s Web site at www.epc.msu.edu .

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