Do market forces in education increase achievement and efficiency?
Academics found the evidence that market forces improve education achievement and efficiency was “fragmented and inconclusive”.
A major review looked at a huge amount of research. This had mostly taken place in the United States although some researchers looked at other countries including Sweden, Chile and the UK. The reviewers found:
1 The scope of much of the research was limited to test scores in reading and maths. This neglected other subjects or other kinds of achievement.
2 Any positive effects were small and statistically insignificant. They were usually limited to reading. Results for maths tended to be lower than reading.
3 Competition between schools carried a risk of increased segregation particularly when schools set out to attract certain types of students like faith groups.
4 Findings about the impact of market forces on efficiency – increasing achievement while lowering costs – were inconclusive.
5 Schools in competition with each other often shifted expenditure from teaching to non-teaching spending such as marketing.
6 No link was found between innovation and market mechanism. The opposite was true in many cases – schools in competition with each other tended to become more traditional.
7 Many researchers had argued about whether raw exam results were reliable indicators of school quality. They found it was not easy to separate “good”, “average” and “bad” schools using test scores alone. Some researchers concluded that published league tables which were supposed to help parents choose between schools was a “somewhat meaningless exercise.”
In conclusion: the authors admitted that little was known about the long-term effects of introducing market forces into the education system. However, they warned, “Compared with government aims when market mechanisms are introduced in education and the fierce tone of the political as well as the academic debate on these issues, the effects as reported in empirical research are modest to say the least.”
UPDATE 16 January 2013: The Academies Commission (2013) reviewed evidence about US charter schools, Swedish Free schools (friskolor) and Chile’s semi-privatised system. It found evidence was wide-ranging and issues were “methodologically exceptionally complex”. Much of this evidence remains disputed. The Commission found charter schools, friskolor and similar schools had been successful in some jurisdictions*but this success was countered by failure in many of the schools.
The Commission concluded that evidence about the effectiveness of these policies was difficult to establish. The countries that had most implemented these strategies had not reported a substantial increase in the Programme for International Student Assessment (PISA) tests although they reported improvements on some national performance measures. (Note: these are normally restricted to performance in Maths and English, PISA measures Reading, Maths and Science. Performance in these tests should not be regarded as a judgement on a country’s entire education system).
The Commission found that reports of raised attainment are accompanied by other reports which showed increased social segregation.
*jurisdictions are not whole countries but parts of countries eg states, provinces, municipalities.
For the latest review of evidence, published 16 January 2013, about market intervention in education in Sweden and Chile, see the faq which deals with this in more detail.
The Academies Commission report can be downloaded here.