Fed Alert: FRBNY Studies "Educational Intervention"

In a climate where the word "czar" can be casually bandied about without raising an eyebrow, the New York Fed isn't the least bit shy about studying "intervention" in each and every form.

And this relates to monetary policy how?:

Program Design, Incentives, and Response: Evidence from Educational Interventions

Forthcoming

JEL classification: H40, I21, I28

Rajashri Chakrabarti In an effort to reform K-12 education, policymakers have introduced school vouchers—scholarships that make students eligible to transfer from public to private schools—in some U.S. school districts. This article analyzes two such educational interventions in the United States: the Milwaukee and Florida voucher programs. Under the Milwaukee program, vouchers were imposed from the outset, so that all low-income public school students became eligible for vouchers to transfer to private schools. In contrast, schools in the Florida program were only threatened with vouchers, with students of a particular school becoming eligible for vouchers only if the school received two “F” grades in a period of four years. Unlike the Milwaukee schools, Florida schools therefore had an incentive to avoid vouchers. Using school-level data from Florida and Wisconsin, this study shows that the performance effects of the threatened public schools under the Florida program have exceeded those of corresponding schools in Milwaukee. The lessons of the study are broadly applicable to New York City's educational reform efforts.

HTML executive summary PDF full article22 pages / 302 kb Press release

Given that the new Bureau of Consumer Financial Protection is being sequestered (off balance sheet) under the Fed's umbrella, is it paranoid to wonder if we'll see similar shifts with respect to educational concerns? Or, is the New York Fed simply targeting the victims of its next PR campaign?