Impact of For-Profit and Non-Profit Management on Student Achievement: The Philadelphia Intervention, 2002-2008

The School District of Philadelphia, in the summer of 2002, at the request of the State of Pennsylvania, asked for-profit and nonprofit managers to participate in a substantial restructuring of its lowest-performing schools under the overall direction of the Philadelphia School Reform Commission (SRC). Thirty elementary and middle schools were contracted out to for-profit management organizations; 16 schools were contracted out to nonprofit organizations. Using individual student test-score data made available by the School District of Philadelphia, we estimated the impact of for-profit and nonprofit management on student achievement by tracking the performance of students in math and reading from 2001 to 2008. The first two years (2001 and 2002) provide us with information about student performance prior to the management intervention, while the subsequent six years (2003, 2004, 2005, 2006, 2007 and 2008) provide information about student performance after the interventions had begun. The measures of test performance are taken from three tests: the Terra Nova, the Stanford 9, and the Pennsylvania State System of Assessment (PSSA), the test Pennsylvania administers to comply with the accountability requirements in the federal No Child Left Behind Act (NCLB). Of the 30 schools included in the study that were under for-profit management, 20 were managed by Edison Schools, five by Victory Schools, and five by Chancellor Beacon Academies. Of the 16 schools included in the study that were managed by nonprofits, five were managed by Foundations, three by the University of Pennsylvania, five by Temple University, and three by Universal Companies. We compare the performance of the privately managed schools to that of 71 schools that remained under regular school district management whose students performed below the district median. This paper includes information for two more years (school years ending in 2007 and 2008) beyond what was previously reported in Peterson and Chingos (2007). It also examines the impact on test scores of the five schools for whom the for-profit contract was revoked by the school district.