Jewish Education Economics 101
-- George D. Hanus
Everyone knows that in most cases, as the price of a consumer item increases, fewer people will purchase that item. As economists are wont to do, they have given this observation a fancy name: the law of price elasticity.
There are two major exceptions to this rule. The first involves the purchase of necessities. If the consumer views the good to be a requirement such as milk for a baby, consumers will make substantial sacrifices to purchase that good irrespective of its price.
The second exception to the law of price elasticity concerns Veblen goods (named for Thorstein Velben, 1857-1929, economist and coiner of the phrase "conspicuous consumption"). We know them as snob appeal items. The more outrageous the price, the more desperately people want them. The actual quality of the product is not as important as the perception of it or the lifestyle image it conjures up. Louis Vuitton or Chanel, anyone?
The laws of price elasticity are universally understood except among the Jewish philanthropic and rabbinic leadership. The problems facing the Jewish community are well known: rising assimilation and intermarriage, little spiritual connection to God, sparse synagogue attendance and a general malaise and apathy among Jewish youth. Studies and social commentators all agree that if we provide high-quality, affordable, intensive Jewish education to all Jewish families who seek it, these Jewish social ills will diminish.
The obvious common-sense approach would be very simple. Every community should provide an affordable Jewish education for all of its children. The question becomes, who will pay for this education?
As we learn from our economist friends, as the price of tuition rises, the number of families willing to enroll their children in a Jewish day school will decrease. But, as in the secular world, in the Jewish world holds two exceptions to this rule: Orthodox families and very rich Jews.
Among the Orthodox, Jewish education is a necessity. These families will make whatever personal sacrifices are required in order to educate their children.
And among the wealthy, a Jewish education in some communities is like a Veblen good, considered of such high status that people will acquire it with little thought to cost or quality.
Notwithstanding the never-ending, spineless institutional hand-wringing among the upper echelons of Jewish leadership, there is not one Jewish community in the United States that has stood up and said: We will provide affordable high-quality Jewish education for all Jewish children who seek it, irrespective of their stream of religious affiliation or parents’ financial condition.
Sadly, most Jewish philanthropic and rabbinic leaders pooh-pooh the concept of free Jewish education as being foolish, while simultaneously attempting to marginalize, ridicule and isolate its proponents.
These alleged leaders advance multiple arguments. One of their lame excuses is that the community cannot raise the enormous amount of money required. An even more outrageous excuse is that the number of Jewish children attending these schools will never rise dramatically whatever the price.
Both these arguments are ridiculous. One of the fundamental pillars of Judaism is the obligation to our children. Talmudic literature makes it clear that our entire world exists for the sake of our children studying Torah. The Talmud goes on to say that any city that does not have children studying Torah is destined to be destroyed.
We, the wealthiest Jewish community in the history of our people, cannot use the disingenuous excuse that we lack communal resources. What those communal philanthropies are really saying (but are afraid to publicly admit) is that funding Jewish education is not their highest priority.
This is proven by deed. Examine the published agendas of any federation or rabbinic assembly. Not one of these groups has ever devoted their entire annual meeting to the issue of funding Jewish education.
Those who say that more Jewish children would not enroll in Jewish day schools if tuitions were lowered are absolutely wrong. In fact, a recent example of the rule of price elasticity was displayed in Cleveland.
About five years ago, after the incidents of September 11, the Midwestern economy was in a recession and Cleveland day schools took a hit. One community day school saw its enrollment decline by 30 percent, while at another, the nearby Gross-Schechter school, enrollment had flattened.
The leadership of the four Cleveland day schools were so alarmed by this trend that they got together with donors and local federation officials to devise a radical remedy: a vast influx of funds to Cleveland day schools.
At least one school,
Gross-Schechter, believing it did not have a captive audience like the Orthodox schools, decided to use the influx of funds to cut its tuition almost in half, from $10,000 per year to $5,500,
representing a potential loss of $630,000 in revenue.
What happened next? Enrollment increased. In the three years since the tuition cut was implemented, enrollment has increased from 275 to 330 students. Even more impressive, preschool enrollment at the school is sold out for next year having grown from 37 to 60 children, most of whom will continue through eighth grade. In addition, the tuition decrease all but eliminated attrition to public schools, which had been averaging about 20 percent per year.
Another important statistic is attrition in general and to public schools in particular.
Following the tuition cut attrition went down and attrition to public school is
practically non-existant.
The cost of the tuition cut was completely offset by increased enrollmet, a $150,000
Federation grant, and contributions by parents and other community donors.
Rabbi Jim Rogozen, headmaster of the school, says that the tuition cut will be permanent. Parents, he says, couldn’t be happier. It no longer a huge financial burden, he says. Parents can be here and smile about it. They’re not worrying every month about making ends meet.
Still, there are naysayers. Many parents and donors have misconceptions about day schools, thinking that they ghettoize children and fail to expose them to the real world.
To these fence-sitters, Rogozen has one reply: come visit the school. He says that those people who actually walk through the doors are extremely impressed. They see a school where the kids are happy and do better in general studies than at the vast majority of public and private schools. Rogozen says that more than 70 percent of the parents who visit his school end up enrolling their kids.
The message: even non-Orthodox parents will send their kids to day school if you lower the price tag.
Another economic rule states that it important to conduct an annual audit of our communal balance sheet. If we did, we know that our most important asset is our children, the only guarantors of the Jewish people future.
George D. Hanus is chairman of the Superfund for Jewish Education and Continuity, the World Jewish Digest and the Jewish Broadcasting Network.
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