Economics of Education Review, 28 (2009): 585-99.
With the financial support of several large foundations and the federal government, creating small schools has become a prominent high school reform strategy in many large American cities. While some research supports this strategy, little research assesses the relative costs of these smaller schools. We use data on over 200 New York City high schools, from 1996 through 2003, to estimate school cost functions relating per pupil expenditures to school size, controlling for school output and quality, student characteristics, and school organization.
The authors find that the structure of costs differs across schools depending upon mission-comprehensive or themed. At their current levels of outputs, themed schools minimize per pupil costs at smaller enrollments than comprehensive schools, but these optimally sized themed schools also cost more per pupil than optimally sized comprehensive schools.They also find that both themed and comprehensive high schools at actual sizes are smaller than their optimal sizes.