Critics of school-choice policies have argued that charter schools and taxpayer-funded private-school scholarship programs lead to “cherry picking” of the best students and, indirectly, to increased racial segregation in which the best schools are those with predominately white student bodies.

But a new paper from the Council of Economic Advisers notes that reams of research demonstrate the opposite is true. School-choice programs increase integration, while segregation becomes worse when school-choice is restricted to a family’s ability to buy a new home in another, better-performing traditional public-school district.

“Expanding Educational Opportunity through Choice and Competition,” a new report by the Council of Economic Advisers, reviews data and research on school-choice programs since the 1990s.

The report notes that some critics suggest school-choice programs effectively benefit only the best students and harm other students left behind in a traditional public school, and that those left behind are disproportionately low-income minority students.

“In theory, choice programs could disproportionately entice away more advanced or more motivated students from the DPS (district public school) system, leaving behind struggling students who lose the benefits of interacting with their high-performing peers,” the report states. “Similar to the default method of school choice—the ability to move to a more affluent area with better schools—this might create segmentation by family background that harms some students who remain in the DPS system. However, as we discuss, these theoretical concerns are not borne out by empirical research, in part because most school choice programs include design features that avoid such outcomes by targeting eligibility or providing more generous resources to relatively disadvantaged students.”

The report notes that the design features that aid low-income students include providing larger scholarship awards to such students when they participate in voucher programs, “which directly limits the potential for income-related sorting.”

Similarly, when charter schools are near capacity, seats are awarded to students through random lotteries.

“The result is that schools will compete based on value added rather than on their ability to select students,” the council report states.

The report notes that research released in 2016 found charter schools were “more likely to have a disproportionately nonwhite student population and DPSs more likely to have a disproportionately White student population.”

Research released in 2017, which reviewed the Louisiana Scholarship Program, found “that most students using the vouchers reduced racial stratification in the public schools that they left and had only small effects on racial stratification in the schools to which they transfer.”

That’s in contrast to what occurs when families’ ability to exercise school choice is based solely on their ability to buy a home in a district perceived to provide a higher quality education than other nearby public schools.

With “traditional mobility-based competition” that involves families choosing homes based on school district lines, the report notes that “because of the financial barriers that lower-income students’ families face to moving, competition between districts for residents is likely insufficient on its own to substantially improve school quality for such students. Thus, additional school choice within a district may be needed to foster the procompetitive effects that hold schools accountable for delivering better outcomes.”

The financial barriers for low-income families in “mobility-based competition” between school districts is substantial. A U.S. Senate committee report found the median home price in neighborhoods with the highest-quality schools is about $486,000 compared to $122,000 in neighborhoods with the lowest-quality schools.

When home purchases represent the primary method of exercising school choice, the associated financial barriers often lead to racial segregation with typically higher-income white families living in the best school districts while minorities are overrepresented in lower-quality public schools.

In contrast, based on research, the report notes that “even when some selective sorting occurs, school choice programs may still outperform the traditional mobility-based system that relies on sorting across neighborhoods based in part on family affluence.”

When families are given school-choice opportunities through charter schools, taxpayer-funded scholarships for private schools, and similar programs, the Council of Economic Advisers notes that the link between family income and access to a quality K-12 education is weakened if not severed.

“By separating the decision of where to attend school from where one lives,” the report states, “school choice has the potential to reduce the role of income and race disparities in providing educational opportunity.”