Shoots from the Grassroot Institute of Hawaii – Jan. 29, 2004-Larger Means less Efficient in School Districts; Economies of Scale Work in Reverse in Education

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”Grassroot Comment:”

”’In light of Gov. Lingle’s proposal to break up the current state school system into seven local school boards, this review of a study that supports that proposal with research showing that smaller school districts are more effective, spend money more efficiently and wind up spending more education dollars per student, as opposed to a larger administration.”’


”’The following is a think tank editorial report that answers the question posed by Senate President Robert Bunda in response to Lingle’s State of the State speech when he asked, “The question is, will the school boards have any impact on student achievement?” He replied to his own question, “The answer is no” but this is not borne out by research. By reducing the size of school boards, local communities are empowered and per pupil spending and student achievement rises. It is reprinted by permission from The Heartland Institute.”’

”Larger Means less Efficient in School Districts; Economies of Scale Work in Reverse in Education”

Written By: School Reform News staff

Published In: School Reform News

Publication Date: Feb. 1, 2000

While public school officials support the notion that “smaller is better” when it is applied to class or school sizes, the concept meets a much cooler reception when applied to reducing the size of school districts, according to a new study from the Alexis de Tocqueville Institution.

Author Mike Antonucci nevertheless makes a compelling case for breaking up large school districts, which generally devote a smaller portion of their resources to student instruction than do smaller districts.

Indeed, even though U.S. Education Secretary Richard Riley recently voiced his criticism of “high schools the size of shopping malls,” smaller schools aren’t likely to be created unless large school districts are actually broken up. A 1990 Clemson University study concluded that “school district size is the most significant factor in determining school size, with consolidation/reorganization plans generally resulting in larger schools.”

Driven by the belief that economies of scale would make the delivery of education more efficient in larger districts, the consolidation of more than 130,000 small school districts was one of the most dramatic changes to the structure of public education during the last century. In 1928, there were 150,000 school districts in the United States. By 1937, there were 119,001. In 1970, the number had plummeted to 17,995, reaching 14,841 by 1996.

Today, there are 24 districts in the U.S. with enrollments that exceed 100,000 students.

If economies of scale were in effect — with fixed costs being spread over a larger operation — then one would expect that a school district’s spending on instruction would increase as a share of the total as the size of the district increased. But Antonucci finds just the opposite to be the case. He concludes that the American public school system suffers from “penalties of scale.” Instead of making up a larger percentage of the budget as school district size increases, the percentage spent on teachers, books, and teaching materials goes down.

“Paradoxically, the larger a school district gets, the more resources it devotes to secondary or even non-essential activities,” writes Antonucci in the November 17, 1999, report “Mission Creep: How Large School Districts Lose Sight of the Objective: Student Learning.”

For example, the average U.S. school district spends 61.7 percent of its budget on instruction — teachers, books, and teaching materials. But many of the nation’s largest school districts spend less on instruction than the U.S. average rather than more. Florida’s Broward County spends 55.7 percent of its education budget on instruction, Maryland’s Baltimore County spends 55.3 percent, and Florida’s Orange County spends barely half — just 52.2 percent — on student instruction.

When Antonucci examined the proportion of district employees devoted to teaching, the picture looked no better. For the average U.S. school district, only slightly more than half of the employees, 52 percent, are teachers. But in Philadelphia, only 48 percent are classroom teachers. In Detroit, there are three non-teaching employees for every two classroom teachers.

In stark contrast, Rhode Island — with an average school district enrollment of only 9,222 students — spends two-thirds of its education budget on instruction. Over 63 percent of its education employees are classroom teachers.

This diversion of resources in large districts away from the primary instructional mission is likely to shortchange minority students most, notes Antonucci, since enrollment in the nation’s largest school districts is dominated by ethnic and racial minorities. He recommends breaking up large districts if they prove incapable of using their resources more efficiently

Mike Antonucci’s Nov. 17, 1999, report “Mission Creep: How Large School Districts Lose Sight of the Objective: Student Learning,” is Alexis de Tocqueville Institution Issue Brief No. 176. It is available on the Institute’s Web site at


“There are several possible explanations for the finding that charter schools outperformed their regular public school counterparts. One possibility is that charter schools benefit from the freedom they enjoy from many state regulations. With less of a regulatory burden, charter schools may be able to focus more of their energies on assisting students and enjoy greater flexibility in meeting student needs. The better academic performance of charter schools could also be a result of their being schools of choice. By allowing families to send their children to schools of their own choosing, charter schools may permit more efficient matching of student needs with school capabilities. Given that not every child learns in the same way, charter schools help families find a school that works well for them and their children. This “choice factor” may also produce better academic performance in charter schools because of the incentives that charter schools face when attempting to attract and retain students. Unlike public schools, to which students are assigned based on residence, charter schools have to earn their students. This makes it more likely that they will better serve those students’ needs.”

Jay P. Greene, Ph.D.

Senior Fellow, Manhattan Institute for Policy Research

Greg Forster, Ph.D.

Senior Research Associate, Manhattan Institute for Policy Research

Marcus A. Winters,

Research Associate, Manhattan Institute for Policy Research

”Thought for the Day’

Perhaps the most valuable result of all education is the ability to make yourself do the thing you have to do, when it ought to be done, whether you like it or not. –Thomas H. Huxley

”’This editorial is intended to provoke thought, discussion and an examination of issues. It does not reflect official policy of the Grassroot Institute of Hawaii. See its Web site at:”’

”’ reports the real news, and prints all editorials submitted, even if they do not represent the viewpoint of the editors, as long as they are written clearly. Send editorials to”’