Benefits of more parental choice in state schools

Rather than trying to stop six-year-olds enrolling in private schools, education minister Kader Asmal ought to unleash the market throughout education by introducing a simple voucher system. Parents would take their child's state-provided voucher to the school of their choice – public or private, religious or secular, integrated or segregated, near or far, etc. They would make up any extra costs from their own pockets – which already provide the taxes for vouchers.

Asmal certainly has no such voucher system in mind, but a recent issue of The Economist magazine reviews two studies by Caroline Hoxby of Harvard University which offer several useful pointers from the American public school experience.

Poorer students benefit from contact with better students, but naturally this is no excuse for any government to tell a child that "you must stay in this bad school because you are helping other pupils". Some US cities have more school districts than others, so parents can easily move between districts and thus choose between schools. School performances differ, and at first sight it is not obvious how much choice affects performance and vice versa. But as in any other market, competition between schools should clearly improve performance.

Ms Hoxby has analysed school choice and performance to unravel the linkages, finding that greater choice:

Improves performance (test scores and students' future earnings)

Reduces spending on education – improved performance comes at lower cost

Provides the biggest improvements where school districts have the most financial independence

Reduces demand for private education – district consolidation and more state control of spending increase private-school attendance and reduce voter interest in the state of public education

Does not favour the rich more than the poor – the effects barely differ for prosperous and poor families, or white and black families

So everybody gains, except bad teachers. Teacher unions usually oppose ways of introducing competition among schools. Ms Hoxby shows that greater choice increases demand for better qualified teachers, those who went to better colleges, those who have good maths and science skills, and those who are willing to work longer hours than their contracts require. Where there is more choice, schools do not always pay teachers more, but what they pay varies more with teacher quality, and they retain well-qualified teachers longer than do schools with less parental choice.

Source: Caroline Hoxby Does Competition Among Public Schools Benefit Students and Taxpayers? American Economic Review, December 2000; Would School Choice Change the Teaching Profession? NBER Working Paper 7866 (http://papers.nber.org/papers/W7866).