Private Management in Philadelphia District Found to Yield Payoff

By Dakarai I. Aarons — February 23, 2009 5 min read

Philadelphia schools run by for-profit companies outperformed district-run schools in math, and also do better in both math and reading than schools that are managed by nonprofit organizations, a new study by Harvard University researchers concludes.

In the study, to be published in the spring issue of the Hoover Institution’s Education Next magazine, researchers examined test scores over a multiyear period to determine whether students learned more, less, or about the same amount as they would have if the schools had remained under district management.

The study found that students in the 30 Philadelphia schools run by for-profit organizations learned, on average, 60 percent of a year’s worth of math more than they would have in a school run by the Philadelphia district. That outcome was considered statistically significant. They also learned approximately 36 percent of a year’s worth more in reading, which was not statistically significant.

The research was done by Paul E. Peterson, the director of the Program on Education Policy and Governance at Harvard’s John F. Kennedy School of Government, and Matthew M. Chingos, a research fellow with the program. Mr. Peterson is also a senior fellow at the Hoover Institution at Stanford University and the editor-in-chief of Education Next, which is publishing the peer-reviewed study in its forthcoming spring edition.

Comparing Results by Type of Management

Regardless of the method used to make the comparison, students in Philadelphia appear to have learned more in a year in schools run by for-profit groups, and less in those managed by nonprofit organizations, than in schools that remained under district management.


Notes: The fixed-effects estimate includes the approximately 65,000 students for whom at least three test scores are available. The informally adjusted estimate is a less rigorous estimate of impact on the approximately 100,000 students for whom at least two test scores are available.

* Zero represents one year’s worth of learning.
■ Difference between private and district management is statistically significant.
✝ Difference between for-profit and nonprofit management is statistically significant.

SOURCE: Education Next

“I would not end this experiment in the for-profit schools. That would be a mistake,” Mr. Peterson said last week in an interview. “I do think the district might take a good look at what is going on in the nonprofit schools.”

“The other take-away more generally would be as people go forward, if they are going to look for private management, they shouldn’t rule out the for-profit,” Mr. Peterson said. “They may have something to offer.”

Worst Performers

After the district was taken over by the state in 2002, the newly formed School Reform Commission appointed to run the schools contracted with outside groups to manage 46 of the city’s worst-performing schools. Thirty were awarded to for-profit companies and 16 to nonprofit groups, including universities. Twenty schools—the largest share—were put under the management of Edison Schools Inc. of New York City, now known as EdisonLearning. (“Phila. Panel Taps Temple University, Others to Run Troubled Schools,” April 17, 2002.)

Using data supplied by the Philadelphia school district, the researchers analyzed test-score, demographic, and school-enrollment information for students in grades 2-8 from 2001 to 2008. The test-score data include results from the Pennsylvania System of School Assessment, used to determine schools’ status under the federal No Child Left Behind Act, and the Stanford 9 and TerraNova tests, which were given to some students in that time frame.

Comparisons of test scores for students in regular district schools were limited to the lowest-performing half of the district’s 142 schools, to match most closely the performance level of the schools under private management.

Researchers found what they describe as troubling results for the schools run by nonprofit groups, which originally included five schools run by Foundations Inc. of Moorestown, N.J., three managed by Universal Companies, a Philadelphia-based community group, five run by Temple University, and three by the University of Pennsylvania. The district later took back control of six schools under outside managers, five managed by Edison, that failed to make adequate yearly progress under NCLB.

Students in schools run by nonprofits learned, on average, half a year of math less than they would have if they had remained in district-run schools, and 32 percent less in reading, the study found.

If the same students had been in schools run by for-profit organizations, the study calculated, they would have learned an estimated 70 percent or more in math and 33 percent or more in reading.

Sherrine Wilkins, the executive director of school services for Foundations Inc., said the group had not had an opportunity to examine the study closely, but is committed to supporting its four schools.

“There’s always room for improvement, and we are doing everything we can to make that a reality. We’ve seen much improvement over the last six years, and we look forward to increasing those numbers in the years to come,” Ms. Wilkins said last week.

District ‘Committed’

Philadelphia school district officials said they were studying the report and were not yet ready to comment on its findings.

“The district is committed to the diverse-provider model, and all of our education management organizations operate under performance-based contracts holding them to stipulated standards of accountability,” the district said in a statement. “The district remains fully engaged in identifying and replicating those approaches that work to provide children with the best possible learning opportunities and results.”

The new study’s finding are similar to the results of a study released in 2007 by Mr. Peterson that showed privately managed schools outperforming district-managed schools, based on state test scores for two cohorts of 5th graders. (“Study Finds Outside Managers Raised State Scores in Phila.,” April 18, 2007.)

But Mr. Peterson’s results contradict the findings of a 2007 study by the Accountability Review Council, an independent panel established to monitor school improvement in Philadelphia, which found that the schools improving the fastest were run by the district. The privately managed schools were improving performance at overall rates close to or slightly lagging the district’s performance average, according to the review council’s study. (“Panel: Phila. District Should Question Private Management,” March 1, 2007.)

With so many national discussions around mayoral control, the expansion of charter schools, and other alternative forms of governance, Mr. Peterson said it made sense to examine the performance of the Philadelphia model, especially since several years of data are now available.

“It’s a big policy issue out there,” he said. “We don’t have many examples of this happening. I don’t know of another big-city school system where you have the information that allows you to make these comparisons.”

A version of this article appeared in the February 25, 2009 edition of Education Week as Private Management In Philadelphia District Found to Yield Payoff


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