NYC school reform may have produced real economic benefits, but Sonecon report’s analysis is nothing more than fantasy

A recent report, crediting New York City education reforms during the mayoral terms of Michael Bloomberg with boosting the city’s economy by $74 billion, is so seriously flawed as to be useless for policymakers, according to a new review.

Sean P. Corcoran, associate professor of educational economics at New York University, reviewed The Economic Benefits of New York City’s Public School Reforms, 2002-2013 for the Think Twice think tank review project. The review is published today by the National Education Policy Center, housed at the University of Colorado Boulder School of Education.

Professor Corcoran, who is on the faculty of NYU’s Steinhardt School of Culture, Education, and Human Development and is an affiliated faculty member of the Robert F. Wagner School of Public Service and the NYU Institute for Education and Social Policy, is an economist who has conducted research on state and local funding of public schools, the economics of school choice, and human capital in the teaching profession.

The report under review was produced by Robert J. Shapiro of Sonecon, Inc., a Washington, D.C., economic advisory firm, and Kevin A. Hassett of the American Enterprise Institute. It was published by Sonecon.

The Sonecon paper considers the overall effect of a range of school reforms implemented under Mayor Michael Bloomberg – including centralizing school governance while increasing both financial autonomy and accountability for individual school leaders, raising teacher salaries, standardizing curriculum, tying school funding to student need, and aggressively expanding school choice, including opening more than 160 charter schools. The paper attributes to those reforms an aggregate impact of more than $74 billion on earnings (attributed primarily to students graduating during the period of the reforms who might not have otherwise) and on property values.

“While such estimates are always an exercise in some level of speculation, this report relies on highly inappropriate assumptions to reach its conclusions,” Corcoran writes. “Specifically, it attributes all gains in high school completion and college enrollment to the reforms, applies national statistics on earnings and college completion to the marginal graduate in NYC, and extrapolates cross-sectional associations between graduation rates and home prices at the zip code level as the causal effect of higher graduation rates.”

For example, breaking down the report’s math, Corcoran finds that the estimated impact of the Bloomberg-era reforms on property values is equivalent to “two-thirds of the entire increase in residential property values between 2007 and 2013.”

The Bloomberg-era reforms were also preceded by a landmark court ruling in the case Campaign for Fiscal Equity, et al. v State of New York (719 N.Y.S.2d 475), which Corcoran notes “helped drive a large increase in state resources for the City’s schools.” Yet that case is not mentioned in the Sonecon report.

Corcoran writes that many New York City public school students did experience “real educational and economic gains” during the Bloomberg reform era, something that has been documented in other, much more carefully conducted research. But the “back of the envelope” estimates that the Sonecon report makes, he concludes, “are pure fantasy.”