Chapter 11
Economics of School Reform for At-Risk Students1

HENRY M. LEVIN

Stanford University

The United States faces an immense crisis in educating at-risk students, who are unlikely to succeed in existing schools. Such students comprise over one-third of all elementary and secondary school enrollments, and their numbers are rising absolutely and proportionately over time. At-risk students are about two years behind grade level in school achievement by sixth grade and are performing at about the eighth-grade level if/when they graduate from high school. More than half do not graduate. Their poor educational performance does not provide them with the skills needed for labor market success or further training, a situation with serious consequences for the nation's economy.

At-risk students are defined as those who are unlikely to succeed in school as the schools are currently constituted because they do not have the home, family, and community experiences on which school success is built. Existing curriculum and instructional practices are not neutral with respect to which students succeed. Those who come from middle-class nonminority backgrounds with both parents present and who speak a standard version of English are much more likely to be successful in school than those from poor, minority, immigrant, nonstandard English, and single-parent backgrounds. At-risk students are caught in a mismatch between their home situations and what is required for success in school. The impact of family characteristics and school achievement has been

1  

This paper was prepared under the auspices of the Panel on the Economics of Educational Reform, funded by the Pew Charitable Trusts and by a grant to the author from the Spencer Foundation. The author is the David Jacks Professor of Higher Education and Economics at Stanford University.



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--> Chapter 11 Economics of School Reform for At-Risk Students1 HENRY M. LEVIN Stanford University The United States faces an immense crisis in educating at-risk students, who are unlikely to succeed in existing schools. Such students comprise over one-third of all elementary and secondary school enrollments, and their numbers are rising absolutely and proportionately over time. At-risk students are about two years behind grade level in school achievement by sixth grade and are performing at about the eighth-grade level if/when they graduate from high school. More than half do not graduate. Their poor educational performance does not provide them with the skills needed for labor market success or further training, a situation with serious consequences for the nation's economy. At-risk students are defined as those who are unlikely to succeed in school as the schools are currently constituted because they do not have the home, family, and community experiences on which school success is built. Existing curriculum and instructional practices are not neutral with respect to which students succeed. Those who come from middle-class nonminority backgrounds with both parents present and who speak a standard version of English are much more likely to be successful in school than those from poor, minority, immigrant, nonstandard English, and single-parent backgrounds. At-risk students are caught in a mismatch between their home situations and what is required for success in school. The impact of family characteristics and school achievement has been 1   This paper was prepared under the auspices of the Panel on the Economics of Educational Reform, funded by the Pew Charitable Trusts and by a grant to the author from the Spencer Foundation. The author is the David Jacks Professor of Higher Education and Economics at Stanford University.

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--> summarized in a recent publication of the Rand Corporation (Grissmer et al., 1994). An effective set of policies to improve the educational outcomes of at-risk students requires that both the in-school and out-of-school experiences of these children be addressed. This chapter considers school-based strategies for improving substantially the educational outcomes of at-risk students, beginning with an overview of the crisis of at-risk students. The next section examines the prospect of improving the education of at-risk students simply by increasing educational expenditures, followed by a review of cost-benefit studies of particular investment strategies. The chapter then considers a more radical transformation of educational institutions, and a final section addresses strategies for systemic change. The Crisis of At-Risk Students Addressing the needs of at-risk students is important because they comprise a large and growing portion of school enrollments and their poor educational performance has significant consequences for the economy and society. High school completion represents a minimum qualification for the vast majority of jobs in the U.S. labor force and for eligibility for further training. Students from minority and low-income backgrounds are far more likely to not complete high school than are students from other groups, and the numbers of school-age minorities and children from poor circumstances are increasing. Among 25 to 29 year olds in 1985, only about 14 percent had failed to complete high school or its equivalent (Bureau of the Census, 1987). For blacks, however, the figure was 19 percent, and among Hispanics it was almost 40 percent. For all races, students from families of low socioeconomic status have considerably higher dropout rates than those from more advantaged backgrounds (Rumberger, 1983). Similarly, children from low socioeconomic backgrounds and of minority status have considerably lower test scores than their white and nondisadvantaged counterparts (Smith and O'Day, 1991). The heavy incidence of minorities and those from low-income families whose children are at risk is particularly ominous because it is these very populations that represent a substantial and increasing portion of school enrollments. Between 1976 and 1992 the proportion of minority students rose from 24 to 32 percent (National Center for Education Statistics, 1994). By the year 2020, minority children will represent almost half of all children 17 and under (Pallas et al., 1989), a figure that has already been reached in California and Texas. Minority students comprise three-quarters or more of the school enrollments in many of the largest cities of the nation, including New York, Chicago, Los Angeles, Philadelphia, Miami (Dade County), and Detroit (McNett, 1983). Minority enrollments have been increasing at a more rapid pace than the general population because of unprecedented birth rates and immigration, both legal and undocumented. Both factors create rapid growth, particularly among school-age populations.

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--> When poverty is used as an indicator for "at-risk" populations, a similar pattern emerges. In 1970 less than 15 percent of children under age 18 lived in poverty; by 1992 it had risen to 21 percent (National Center for Education Statistics, 1994) and is expected to rise to 27 percent by the year 2020 (Pallas et al., 1989). Between 1984 and 2020, the number of children not living with both parents is expected to rise by 30 percent, from 16 million to over 21 million (Pallas et al., 1989). In view of the fact that real incomes of single mothers with children fell in absolute terms by 13 percent between 1970 and 1986, this is an especially ominous trend (Congressional Budget Office, 1988). Trends for other indicators of at-risk children have been moving in the same direction. Pallas et al. (1989) project that the number of children raised in families where the mother has not completed high school will rise by 56 percent to over 21 million by 2020. Many of the immigrants who come from rural regions of some of the poorest countries in the world have low educational levels. For example, among Mexican immigrants into California, the largest national group, only 28 percent had more than an eighth-grade education in the early 1980s (Muller, 1985). The proportion of at-risk students is high and increasing rapidly. Rough estimates derived from various demographic analyses suggest that upwards of one-third of all students in kindergarten through twelfth grade are educationally disadvantaged or at risk (Levin, 1986). When achievement is used as a criterion, the proportion of educationally at-risk students may be as high as 40 percent (Kennedy et al., 1986). General Economic Implications The rising numbers of at-risk students and their continuing failure to succeed educationally will have severe economic ramifications for the United States. One consequence will be a deterioration in the quality of the labor force. As long as at-risk students were a small portion of the population, they could be absorbed by low-skill jobs or fail to get jobs without direct consequences for the economy. High dropout rates, low test scores, and poor academic performance of a larger and larger portion of the school population mean that a larger portion of the future labor force will be undereducated for available jobs, not only managerial, professional, and technical jobs but even the lower-level service jobs that are increasingly important in the U.S. economy (Rumberger and Levin, 1989). Clerical workers, cashiers, and salesclerks all need basic oral and written communications skills, the acquisition of which is hardly guaranteed in the schooling of the disadvantaged (National Research Council, 1984). Test scores (Smith and O'Day, 1991) suggest that many at-risk students are not even acquiring the foundation necessary to benefit from employer training that would increase their productivity and job mobility. As at-risk populations become an increasingly larger share of the U.S. labor

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--> force, their inadequate educational preparation will be a drag on the competitive performance of the industries and states in which they work and on the nation's economic performance. Employers will experience lagging productivity and higher training costs. The problem will be especially severe for such states as California and Texas, which have the largest growth in these disadvantaged populations, and for the industries that are dependent on these populations to fill their labor needs. State and federal governments will suffer a declining tax base and a concomitant loss of revenues that could be used to fund improvements in education and other services. The implications are also severe for higher education. Without earlier educational interventions, at-risk students who remain in school will graduate with more learning deficits that will prevent many of them from benefiting from current levels of instruction in colleges and universities. High levels of college failures and dropouts and massive remedial interventions mean wasted time for students and wasted resources for colleges, not to mention the psychological toll of failing to "make it." Substantial remedial activities require additional faculty members. Extended periods in college will impose a greater cost in tuition and lost earnings. A third consequence of failing to deal with the challenge of at-risk students will be the rising costs of public services, as more citizens rely on public assistance and undereducated teens and adults pursue illegal activities to fill idle time and obtain income. In a national sample of 19 to 23 year olds in 1981, 72 percent of the jobless, 79 percent of those on public assistance, and 68 percent of those arrested the previous year had scored below average on the Armed Forces Qualification Test (AFQT) measure of basic skills (Berlin and Sum, 1988). Among 18- to 23-year-old males in 1981, those with a high school diploma had a 94 percent lower probability of arrest than dropouts; among girls ages 18 to 21, the high school graduates had a 54 percent lower probability of having an out-of-wedlock baby (Berlin and Sum, 1988). Failure to address the educational needs of at-risk students will adversely affect labor force productivity, public health status, and a variety of other important social outcomes (Haveman and Wolfe, 1984). When all of the outcomes associated with education are taken into account, it has been estimated that education has twice as high a return as when only its effect on income is measured. More Resources The most frequent strategy for addressing the poor results of at-risk students is to seek more educational resources. Many public schools are inadequately funded to meet the increasing demands placed on them by rising numbers of at-risk students. Some egregious examples are described by Kozol (1991). There is little evidence, however, that higher spending by itself will have a profound impact on at-risk students without changes in how the resources are used. Hanushek (1986, 1989) has argued that statistical studies have shown little rela-

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--> tionship between expenditures per student and the specific resources purchased—for example, longer teacher experience, higher teacher degrees, and smaller classes—on the one hand and student achievement on the other. Hedges et al. (1984) reanalyzed the set of studies reviewed by Hanushek and have challenged his interpretations. These challenges have been buttressed by Card and Krueger (1992), who found that statistical models, using state data, showed positive relationships between school expenditures and school characteristics of students and their later earnings as adults. However, attempts to replicate these results using data at the school and district levels have not shown similar patterns (Betts, 1994; Grogger, forthcoming). My own interpretation is that increasing expenditures will have modest effects on student achievement unless used to support particular programs that have been shown to be effective or combined with major organizational changes in schools. The view that focusing school expenditures on the poor, as was done beginning in the 1960s, will have some positive effect is supported by recent Rand Corporation study findings of minority test scores improving in excess of what could be explained by improvements in demographic factors (Grissmer et al., 1994). Elsewhere, I have argued for greater equity in expenditures on behalf of at-risk students for reasons of fairness and social efficiency (Levin, 1991b). But additional resources will not have powerful effects unless (1) they are targeted on particularly effective learning strategies for at-risk students, such as those illustrated in the next section, or (2) school organizations are transformed to increase the general effectiveness with which they use resources. Undoubtedly, there are schools and school districts around the country that are so seriously underfunded that additional resources could make a big difference. Adequate resources are a necessary condition for meeting the educational needs of at-risk populations but not a sufficient condition (Levin, 1994). Additional resources must be combined with considerably more effective strategies than most schools are currently using (Hanushek et al., 1994). Returns on Educational Investment for At-Risk Students Although there are likely to be considerable benefits from investing in at-risk student populations, there are also likely to be significant costs. To justify such investments from an economic standpoint, we need to know if the benefits exceed the costs and, if so, by magnitudes equal to or greater than alternative social investments. This section reviews the results of cost-benefit studies of educational investments for those populations. Programs for Reducing the Number of High School Dropouts A number of economic studies have addressed the costs and benefits of reducing the numbers of high school dropouts. In the earliest study on the

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--> subject, Weisbrod (1965) compared the impact of a St. Louis program designed to reduce dropout rates among ''dropout-prone" high school students with the results of a control group of similar students who did not have such a program. The dropout prevention program was associated with a high school completion rate about 7 percent higher than that of the control group. Weisbrod estimated the cost for each of the additional graduates and contrasted it with the estimated income benefits of high school graduation for these students. He concluded that the costs of the program exceeded its benefits. There are two reasons that more recent analyses of well-designed dropout programs show stronger benefits. Weisbrod used 1959 Census Bureau data to estimate the additional incomes of the graduates. For reasons of discrimination and other factors, the earnings of women and minorities were much lower relative to white male's earnings some 30 years ago than they are today. Since the dropout-prone group included large numbers of females and minorities, the benefits of intervention were probably understated relative to those that would be obtained with more recent data. Furthermore, the earnings advantages of high school graduates relative to dropouts has increased substantially in the past two decades (National Center for Education Statistics, 1994). A more recent study of dropout prevention found large net benefits (Stern et al., 1989). This evaluation was based on success in reducing the number of dropouts at 11 academies created in California public high schools. These academies were special programs or schools within a larger high school setting that provided both vocational training for careers in which students stood a good chance of placement and academic training. Students were given special attention by their teachers and by local employers. When matched with a similar group of students in regular high school programs, it was estimated that the academies had graduated 29 persons who otherwise would have been expected to drop out. The marginal costs of the academy program beyond the costs of the regular school program were compared to the additional earnings of the graduates who were "saved" from dropping out. The overall benefits of the program were found to exceed the overall costs by considerable amounts, the specifics depending on which assumptions were used regarding benefits. In contrast to studies of a single dropout program, I undertook a national study on the economic consequences of high school dropouts (Levin, 1972). This study calculated the additional lifetime earnings and tax revenues that would have been generated if the entire cohort of 25- to 34-year old males in 1970 had graduated from high school. It was assumed that the additional earnings of dropouts who would be induced to graduate would be only 75 percent of those of conventional high school graduates. It was also assumed, however, that a portion of the induced graduates would continue into higher education, with additional earnings from that source as well. The total loss of lifetime earnings for this group who failed to complete at

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--> least high school was estimated at about $237 billion. The additional cost of achieving this result consisted of the additional years of schooling undertaken by members of the group and the cost of enriching education to reduce the number of dropouts. It was assumed that it would have been necessary to increase annual spending on those at risk of dropping out by 50 percent a year for their entire elementary and secondary school careers to retain them until completion of high school. On this basis it was estimated that the total costs of achieving at least high school graduation for the cohort was about $40 billion, yielding a benefit of $6 to $1. The additional lifetime earnings would have generated about $71 billion in government revenue, or about $1.75 in tax revenues for each dollar in public expenditure. The study also estimated that inadequate education was contributing about $6 billion a year to the costs of welfare and crime in 1970. Ramirez and del Refugio Robledo (1986) replicated may analysis for the cohort of Texas ninth graders in 1982–1983 who were projected to drop out before their anticipated graduation in 1986. They estimated the benefits of a dropout prevention program as those attributable to savings in public assistance, training and adult education, crime and incarceration, unemployment insurance and placement, and higher earnings associated with the additional high school graduates. Such benefits were calculated at $17.5 billion, and the costs to eliminate dropouts for this cohort were estimated at slightly less than $2 billion, for a cost-benefit ratio of nine to one. Estimates of additional tax revenues were 2.5 times greater than the costs to taxpayers. Catterall (1987) undertook a similar analysis of children who dropped out of the Los Angeles High School class of 1985. He found that because of the dropouts, the Los Angeles class of 1985 was likely to generate over $3 billion less in lifetime economic activity than if all of its members had graduated. Catterall suggested that the cost of investing successfully in dropout reduction would be a mere fraction of this amount. Furthermore, he found that Los Angeles was addressing the dropout problem with specific programs that were spending the equivalent of only about $50 per dropout, or less than one-half of 1 percent of school spending, even though 40 percent of its students were not graduating. Preschool and Higher Education There is evidence that preschool investments in at-risk populations can deter dropouts as well as yield other benefits. Barnett (1985) undertook a cost-benefit analysis of the Perry Preschool Project in Ypsilanti, Michigan. The Perry Pre-school's approach has been studied for three decades and is used as a model for hundreds of preschools for disavantaged students across the country, including the national Head Start program. Students enrolled in the preschool project were followed until age 19. It was found that, relative to a matched control group, project enrollees experienced better school achievement, educational placement, educational attainment, and employment. Monetary values for the benefits were

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--> calculated on the basis of the apparent effect of these advantages on the value of child care during the programs; reduced school expenditures for remediation, special services, and grade repetition; reduced costs of crime, delinquency, and welfare; and higher earnings and employment.2 It was found that the benefits exceeded the costs by a large margin under a wide range of assumptions. The one-year program showed benefits of $7 for every dollar of costs, and the two-year program showed a cost-benefit ratio of about 3.6:1 (Berrueta-Clement et al., 1984). About 80 percent of the net benefits accrued to taxpayers in the form of higher tax contributions and lower expenditures on education, crime, and welfare and to potential crime victims in the form of lower costs for property losses and injuries. A cost-benefit analysis by St. John and Masten (1990) of financial aid to low-income students for higher education also indicated high benefits relative to the costs. Their study compared tax revenues generated by the additional income produced by the higher levels of college participation by low-income students with the costs of financial aid that induced the higher enrollments. The net present value of additional tax revenues was four times as great as the cost of the aid program for students in the high school class of 1980. That is, from the perspective of the federal treasury, such programs had a cost-benefit ratio of 4 to 1. These studies suggest that specific investments in at-risk students yield high social returns relative to the costs and by a margin that is competitive with or superior to that of other highly productive investments. Indeed higher tax revenues and reduced costs for social services more than compensate for the investments. In the case of the early childhood intervention program of the Perry Preschool, most of the net benefits accrued to taxpayers (Barnett, 1985). Summary of Cost-Benefit Results These cost-benefit results suggest that well-designed investments in the education of students who are at risk of undereducation are likely to have high payoffs to society. Although each study is based on imperfect information and entails arbitrary assumptions about both costs and benefits, the overall pattern of findings among studies is remarkably consistent. The estimated benefits of interventions for at-risk students tend to be about three to six times as high as the estimated costs. According to Haveman and Wolfe (1984), the consideration of returns to human capital investments in the form of increases in earnings will capture only about half the total returns. Thus, most of these estimates are understated because they are limited to the effects of educational investments on earnings and do not capture the value of improvements in health, labor mobility, intergenerational effects, and reductions in the 2   A more recent study followed up on students to age 27 with similar results (Schweinhart and Weikart, 1994)

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--> cost of public services as well as a variety of other benefits. On the other hand, some recent work suggests that calculations from cross-sectional data tend to overstate the benefits of human capital investments for at-risk populations (Levin and Kelley, 1994). All of the estimates are based on cross-sectional evidence, with the exception of the preschool intervention. Because there is no direct evidence on the potential degree of overstatement or understatement of these results, a reasonable assumption is that they are offsetting and that the estimates are a first approximation of returns to investments on behalf of at-risk populations. Several other projects have reported strong achievement results in particular subjects in existing schools, although some of the costs have been quite high and need to be reduced. In the area of early childhood reading, these programs include Reading Recovery (Pinnell et al., 1994; Hiebert, 1994), One-On-One Tutoring (Farkas et al., 1994), and Success for All (Madden et al., 1993). An approach to problem-solving and thinking skills also has reported good results (Pogrow, forthcoming). Farkas et al. (1994) have claimed that a program using graduate and undergraduate students paid at hourly rates to provide tutoring to at-risk students has yielded results comparable to Reading Recovery and Success for All at less than one-quarter of the cost. Radical Transformation of School Organization In essence, each of the investments described above is a marginal addition to an existing school organization and might be viewed as inefficient if some other form of school organization could produce considerably better overall results for at-risk students with the same resources. This dilemma was first described by Liebenstein (1966) in studying why some firms with apparently similar resources are much less productive than others. More recently it has been raised with respect to schools by Hanushek et al. (1994), Hoenack (1994), and myself (Levin, 1994). According to this view, schools need to be redesigned to increase their efficiency in converting resources into educational results, along the lines of productive firms but taking account of the special nature of education. The goal is to identify features of efficient noneducation organizations and make those features integral to the design and operation of schools. Economic analysis suggests that efficient firms must exhibit the following features: a clear, objective function with measurable outcomes; incentives that are linked to success on the objective function; efficient access to useful information for decisions; adaptability to meet changing conditions; and use of the most productive technologies consistent with cost constraints (Levin, 1994).

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--> Objective Function In an efficient firm participants understand the purpose of the organization and share a collective focus on that objective. The objective must be associated with measurable outcomes in order to appraise how well the firm is doing (Cyert, 1988). Schools seem far removed from this standard. Objectives often vary from teacher to teacher, with some placing more emphasis on some subjects than others, and some pushing for rote memorization while others stress thinking skills and problem solving. Schools often set different goals for different groups of students according to their ethnicity, race, and socioeconomic origins, often through tracking or streaming of students (Oakes, 1985). Organizational Incentives The principal strategy for inducing employees to pursue the objectives of the firm is to link employee rewards to their performance in contributing to those objectives. In the case of schools there is little evidence of incentives tied to student success (Hanushek et al., 1994). Salary increases tend to be based on seniority and qualifications, not effectiveness. Incentives can be intrinsic (e.g., a sense of accomplishment) or extrinsic (e.g., financial rewards or recognition), individual or collective (Simon, 1991; Holmstrom and Milgrom, 1994). But even if teachers receive some intrinsic satisfaction from their individual accomplishments with students, these do not comprise a link with overall school success or assure articulation of goals from grade to grade and teacher to teacher (Little, 1990). Information To succeed, firms need continuous and systematic information on their overall performance to see if they are meeting objectives. They need rapid feedback on challenges, problems, bottlenecks, and impending obstacles as well as changes in market environments, productions, technologies, and prices that may affect them. Comparable information for education is not readily available at the school level. Indeed, schools rarely have accurate information on alternatives or strategies and channels to obtain that information. Even the test score data on students are usually not available until the end of the school year or the beginning of the following one, and this information is highly incomplete and restricted to a narrow set of dimensions (Office of Technology Assessment, 1991). The lack of timely and useful feedback also limits schools' ability to learn through trial and error, as suggested by Murname and Nelson (1984). Adaptability Firms that are in situations where their markets, products, technologies, costs, and prices are largely stable do not need to adapt to succeed and survive. They

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--> can continue to follow the same practices that have brought them success in the past. But firms facing rapid changes must adapt to changing conditions. This becomes even more challenging when the technology of production is uncertain and requires considerable trial and error to get it right (Murname and Nelson, 1984). Schools often face changes in student populations as neighborhoods change, precipitous changes in budgets from year to year, rapid changes in electronic technologies and their capabilities, and changes in teacher supply as relative salaries change (Murname et al., 1991), as well as new demands such as AIDS education. Yet schools are typically obliged to follow centrally adopted curricula, rules, regulations, and mandates that are obstacles to change and generally lack internal decision-making mechanisms that could be used to adapt to change, if greater input into decision making were permitted. Schools need to have the ability to make decisions on resource allocation in order to adjust to disequilibria (Schultz, 1975). Efficient Technology of Production Finally, efficient firms need to adopt the most productive technologies consistent with cost constraints. Unfortunately, schools tend to follow historical approaches despite attempts to change them through educational reforms (Cuban, 1990). Although most schools still use approaches that require students to memorize material as it is presented, considerable research finds that this is an inefficient teaching and learning technique (e.g., Peterson, 1989; Gardner and Hatch, 1990; Knapp et al., 1992). A more effective approach is to enable students to build on previous experiences and engage in new activities that allow them to construct their own understanding through research, hands-on projects, and other applications. In many respects, this is the approach used for gifted and talented students, but it is becoming increasingly recognized that it works more effectively for all students (Feldhusen, 1992). Creating Accelerated Schools for At-Risk Students Relative to the five characteristics of efficient, productive firms, schools seem to be ill equipped to produce educational services efficiently. The Accelerated Schools Project was designed to improve school productivity dramatically by altering these five dimensions. Starting with only two pilot schools in 1986–1987, the project comprised more than 700 elementary and middle schools in 37 states by 1994–1995. It was designed to transform public schools with high concentrations of at-risk students into organizations that will make all students academically able by the end of elementary school and sustain high levels of achievement through middle school to prepare such students for academically demanding high schools. In the past the schools relied primarily on remedial education, which slows the pace of learning and reduces learning expectations.

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--> These schools have been notoriously unsuccessful in bringing their students into the educational mainstream. Accelerated schools undergo a process of organizational transformation that embodies the five organizational dimensions. Space limitations do not permit a detailed explanation here of the application of these ideas and the transformation process, but details can be found elsewhere (Finnan, 1994; Hopfenberg, 1993; Levin, 1994). Accelerated schools acquire a unity of purpose among staff, parents, and students that is directed at accelerated academic outcomes for all children. This unity is buttressed with a system of decision making that gives all participants incentives to engage in problem-solving methods that will lead to those outcomes building on concepts found in Simon (1991) and Holmstrom and Milgrom (1994). In addition, school staff members along with students and parents acquire training in problem solving and group dynamics, with a focus on assessment of results and the use of powerful learning strategies (Hopfenberg, 1993). Thus, schools develop an objective function, collective incentives to address that objective, shared information, and an ability to adjust to disequilibria. In addition, schools acquire a more powerful technology of learning, usually reserved only for the most gifted and talented students in traditional schools, that is based on constructivist learning approaches (Brooks and Brooks, 1993). To induce these profound changes in organization and operations, schools are introduced to a philosophy and set of practices that require substantial changes in the values and expectations of all participants. The accelerated school undergoes a substantial cultural transformation (Hopfenberg, 1993). Although attempts at such change have been judged to be problematic in the past (Sarason, 1990), evaluations of accelerated schools indicate impressive improvements in student achievement, attendance, and parent participation and reductions in costly policies such as students retained in grade and special education placements. One study found that prior to its transformation into an accelerated school, fifth graders at a Houston school had achievement that was two years below average (McCarthy and Still, 1993). Within three years they were exceeding the national average. A comparison school in the same district with similar students showed declines in achievement over the same period. Evaluations of many schools have shown equally impressive results (see summaries in English, 1992; Knight and Stallings, 1995; Wong, 1994). The costs of this organizational transformation and results have been exceedingly modest, about $30 to $40 per student in the first year of school transformation and less in ensuing years. The transformation of school organizations, or school restructuring (Fullan, 1991), is a promising way to improve the educational outcomes of at-risk students, largely within available resources. The School Development Project (Comer, 1988) and the Coalition of Essential Schools (Sizer, 1992) also represent models of school restructuring, although with less emphasis on the economic model of productive organizations. Such changes will require major policy alterations in the education system, whether reforms are undertaken in the public

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--> sector or shifted to a market environment through exit or choice mechanisms (Hirschman, 1970), decentralization, and a supportive infrastructure to provide information, technical assistance, and assessment of results. Getting There The evidence suggests that there are both effective strategies for conventional schools to address certain educational outcomes and more far-reaching organizational changes to address the needs of at-risk students. The Accelerated Schools Project has had considerable success in getting conventional public schools and parochial schools to adopt its model, but that does not ensure adequate supporting systems at the district and state levels to induce schools to meet the needs of at-risk students (Hanushek et al., 1994). Some reformers believe that only through a market system or public choice mechanism will schools address the needs of at-risk students, and indeed all students, because of competition to attract enrollment. There are few empirical studies to rely on in resolving conflicting claims about the effects of educational markets generally and educational vouchers in particular (Levin, 1991a, c; West, 1991a, b). Only in Milwaukee, Wisconsin, has a voucher plan been adopted for students from low-income families. An evaluation after three years showed that voucher students in private schools were performing no better than similar students in public schools (Witte et al., 1993). At the same time, it is clear that states and school districts need to consider whether they have appropriate systems of educational finance, performance incentives, accountability, information, and flexibility to achieve the changes that have proven effective in schools under the right conditions. Decentralization in Chicago, state reform in Kentucky, and semiautonomous charter schools in many states represent attempts to change the politics of education. It is too early to determine the effects of these changes, but it is clear that new institutional supports must be implemented at higher levels to support the changes that are required in individual schools (Clune, 1993, 1994). References Barnett, W. S. 1985. "Benefit-cost analysis of the Perry Preschool Program and its long-term effects." Educational Evaluation and Policy Analysis (3):333–342. Berlin, G., and A. Sum. 1988. Toward a more perfect union: basic skills, poor families. Occasional Paper No. 3. Ford Foundation Project on Social Welfare and the American Future , The Ford Foundation, New York. Berrueta-Clement, J. R., L. J. Schweinhart, W. S. Barnett, A. S. Epstein, and D. P. Weikart. 1984. Changed Lives: The Effects of the Perry Preschool Program on Youths Through Age 19. Monograph No. 8. Ypsilanti, Mich.: High/Scope. Betts, J. R. 1994. "Does school quality matter? Evidence from the National Longitudinal Survey of Youth." Review of Economics and Statistics. .

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