I recently saw the following table about the increasing cost of private school in NYC:
For context, the annual tuition at Harvard is $59,320, or over $3,000 less than the cheapest school on this list (for 2025-2026). Excuse me, but what the hell is going on? How are high schools charging more than one of the most prestigious universities in the world?
I’ll tell you how—private schools have convinced the upper classes in the United States to believe that they are worth the cost.
But the truth is…they aren’t. In fact, private schooling is the most expensive placebo in America. I can prove it too.
It’s the Genes (Mostly)
When researchers study the impact of a particular factor on lifetime outcomes for children, they break it into three components: genetics ( heritability), the shared environment, and the non-shared environment.
Genetics is exactly what you think—the DNA you get from your ancestors. The shared environment are those things that siblings have in common, like the same parents or attending the same school. The non-shared environment are things that children don’t have in common, like different friends or different teachers.
To measure these three components, researchers compare the outcomes of identical twins (siblings born with the same genetics) versus fraternal twins (siblings born on the same date, but with different genetics). In doing so, they can infer how much genetics impacts height, intelligence, or any other trait compared with the shared or non-shared environment.
For example, let’s imagine a set of identical twin boys versus a set of fraternal twin boys. The identical twins share 100% of their genetics and 100% of the shared environment (i.e., parents, schools, etc.). So any difference in their outcomes must come from the non-shared environment. On the other hand, fraternal twins share 50% of their genetics and 100% of the shared environment. So any difference in their outcomes must be partially genetic and partially from the non-shared environment.
This framework was laid out by Robert Plomin, behavioral geneticist, in Blueprint: How DNA Makes Us Who We Are. And when Plomin examined all the data on school achievement, he came to a surprising conclusion:
In fact, heritability of school achievement is about 60 percent across the school years, higher than the heritability of intelligence, which is about 40 percent.
This means that genetics (heritability) explains 60% of the differences in school achievement between children. What’s the other 40%? The shared and non-shared environment. And the research suggests that half of this 40% is in the shared environment. Plomin once again:
Environmental influence shared by children attending the same schools as well as growing up in the same family accounts for only 20 per cent of the variance of achievement in the school years and less than 10 percent of academic performance at university.
Think about that. All your interactions with your children. The way you raise them. The schools you send them to. All of that only contributes 20% to their school outcomes. It’s not zero, but is it large enough to justify such exorbitant costs? I don’t think so.
In fact, when researchers measure school quality directly, the effect size collapses much further. Plomin found that school quality in the UK explained “less than 2 percent” of the variance in test scores, after controlling for primary school achievement. In other words, the “best” schools aren’t making the students better, they are just selecting better students from the outset.
In this way, it’s not the school that makes the students, but the students that make the school.
Why the Students Make the School (Not the Other Way Around)
You might argue that schools as a whole may not make much of a difference in lifetime outcomes, but selective schools do. Unfortunately, the academic literature doesn’t support this.
How do they demonstrate that selective schools don’t really make a difference? They do something called a regression discontinuity study. That’s just a fancy way of saying “compare people right above a cutoff to those right below it.”
For example, many selective New York high schools have testing cutoffs. If you score above the cutoff, you get into the school, and if you score below the cutoff, you don’t. Researchers compare the students who scored right above the cutoff to those who scored right below it.
In effect, they compare students with near identical ability. They aren’t comparing the all-stars to those who flunked the test. They are comparing students where one or two different answers on a test determined which high school they attended for the next four years.
If the selective schools were so impactful, we would expect to see the students right above the cutoff having much better outcomes than those right below the cutoff. Do we see such an effect? Nope. As researchers at the National Bureau of Economic Research (NBER) concluded:
…as best we can tell, there is little effect of an exam school education on achievement even for the highest-ability marginal applicants and for applicants to the right of admissions cutoffs.
In other words, selective schools achieve great outcomes because they pick the students that are likely to have great outcomes.
This doesn’t mean that school choice doesn’t matter. But choosing a good (free) public school over an elite (expensive) private school doesn’t seem to make much of a difference. A 2006 paper published in the American Educational Research Association (AERA) supports this assertion:
In fact, after demographic differences had been controlled, the private school advantage disappeared and even reversed in most cases.
This finding has been replicated in various voucher programs (see here and here) where students from public schools were given the chance to attend a private school. In both cases, scores did not materially improve (and sometimes fell).
The Network Matters (For Those Outside of It)
I know what you might be thinking though, “I don’t care about the impact of the school on my child, but the impact of the other students at that school. It’s the network that is valuable, not the education. That’s why I send my kids to private school.”
Funny enough, this seems to be true, but not in the way you think. The network is valuable, but only for those far outside of it. As research published in the Quarterly Journal of Economics found:
…students who attended more selective colleges earned about the same as students of seemingly comparable ability who attended less selective schools. Children from low-income families, however, earned more if they attended selective colleges.
Don’t you see the irony though? All the families that can afford private school aren’t low income. In other words, those who can afford private school don’t need it, and those who can’t, do.
This makes logical sense. Someone with a high income likely has high income colleagues, neighbors, and friends. They don’t need to send their kid to an elite school to have access to a good network. But the lower income family does.
I can speak on this from personal experience too. I attended a low quality high school. 89% of students (myself included) were considered “socioeconomically disadvantaged.” Our senior class president didn’t graduate. There was no elite network.
But I was fortunate enough to get into Stanford University. This gave me access to classmates and professors that helped me at multiple points while I was in school. Without this network, I’m certain I wouldn’t be where I am today.
If you have no access to such a network, paying for it can be worth the cost. But for most high income families, you’ll be better off saving (and investing) the tuition money than blowing a quarter of a million dollars for a marginal impact. That $250,000 in forgone tuition could end up being $400,000 (in real terms) for a downpayment on a home by the time your child turns 30. Your children can thank me later.
Until then, thank you for reading!
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This is post 494. Any code I have related to this post can be found here with the same numbering: https://github.com/nmaggiulli/of-dollars-and-data