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Press Release

Education Reform Focus of Cleveland Fed Conference

Nearly 130 education policymakers, children's advocates, and economic researchers attended a conference on 'Innovation in Education' at the Federal Reserve Bank of Cleveland on November 17-18. In her openingremarks, Bank President Sandra Pianalto said the purpose of the conference was to bring together economic researchers and educational practitioners to discuss innovative ideas for improving the U.S. educationalsystem.

The conference focused on the issues of choice and competition, and looked at the pros and cons of innovations such as school vouchers and charter schools. When evaluating the merits of these and other newinitiatives, Pianalto told attendees to keep in mind that change takes time and that the longer-term benefits of new innovations are often obscured by short-term upheaval. "We may not capture the full returns from aninnovation for many years," she said, noting that society has only recently started reaping the benefits of technological innovations that were developed decades ago. Pianalto also emphasized the importance ofunderstanding the incentives that new education policies or programs may create, particularly since some of those incentives may have unintended consequences.

Eric Bettinger, an assistant professor of economics at Case Western Reserve University, examined a voucher program in Colombia and found that it led to improved academic outcomes for students who participated inthe program.

Examining the Cleveland Scholarship and Tutoring Program, Clive Belfield, an economist and professor at the City University of New York, found no academic advantages for voucher users in second and fourth gradetests. However, Belfield noted that achievement gains may not be the best measure of whether vouchers work, and that other measures, such as drop-out or truancy rates, may be more appropriate. He also concludes thatit is plausible that some voucher programs will be highly effective just as others may not be.

Christopher Berry, an assistant professor at the Harris School of Public Policy, University of Chicago, discussed research which found that students in states with smaller schools obtained higher returns toeducation and completed more years of schooling than students from states with larger schools.

Economics Professor Helen Ladd from Duke University examined North Carolina's charter school program. She found that the charter schools were more segregated racially than traditional public schools. Ladd suggeststhat managed, rather than unrestricted, choice programs hold more promise for reducing school segregation and academic achievement gaps.

Thursday's keynote speaker, Federal Reserve Bank of Chicago President Michael Moskow, talked about a number of reforms that have introduced some choice and competition to the Chicago school system, including theRenaissance 2010 Program, which aims to create 100 new schools with more freedom to innovate. "In bringing about these needed changes," Moskow said, "we have found that partnerships and persistence can make adifference."

On Friday, Federal Reserve Bank of Minneapolis Research Director Art Rolnick, discussed early childhood development (ECD) as an investment in economic development. He noted that the potential annual return to thepublic from focused, high-quality ECD programs might be as high as 12 percent (inflation-adjusted). To establish a successful, large-scale ECD program, Rolnick is proposing a permanent scholarship fund for allfamilies with at-risk children, to be funded by state or local governments in partnership with the private sector and federal government.

Friday's keynote speaker, Brad Jupp, senior academic policy advisor for the Denver Public Schools, talked about ProComp, an innovative program in the Denver school system that links teacher compensation to studentachievement and has the potential to significantly increase the pay of some teachers.

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell,, 513.455.4479