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Market Research

A Quick Guide to the Scholarly Literature on School Choice

By Andrew J. Coulson

During a recent round of visits with print journalists, a newspaper editor told me that she receives between five and ten times as many press releases attacking school choice as she receives in support of it. As a corrective to that lopsided public relations onslaught, she asked if the claims made on behalf of school choice were backed up by solid research, and if so, where that research might be found. In reality, the vast majority of sound empirical studies comparing competitive education markets to state-run school monopolies give the edge to markets. A few find no significant differences, and only the tiniest percentage find any sort of advantage to government operated schools. Moreover, the superiority of free market education is not limited to higher student achievement, but extends to a variety of positive social effects as well. What follows is a short list of studies introducing that empirical literature. Since the purpose of this comparison is to illustrate differences between traditional state-run schooling and markets of competing private schools, public school choice programs and public charter schools are considered incidentally or not at all. Wherever possible, research summaries are cited so as to make the most efficient use of the reader’s time. The material is organized by topic, and links are provided for studies (or summaries thereof) available on the Internet. The topics covered are:

Relative academic performance of market vs. monopoly schooling

Racial achievement differences in government and independent schools

Graduation rates in independent vs. government schools

Integration in government and private schools

Other Social Effects of Market vs. Monopoly Schooling

Relative Academic Performance of Market vs. Monopoly Schooling

Though America’s school choice debate usually revolves around a few domestic studies of small, relatively young education voucher programs, that narrowness of focus is unnecessary. In addition to the limited U.S. experiences, competitive education markets exist in other nations on a much larger scale. Furthermore, a wide variety of both market-like and monopolistic education systems have been implemented over the long, worldwide history of formal schooling. The following studies collect and summarize a good cross section of that domestic, international, and historical evidence.

The Domestic Evidence:

Title: “School Choice and School Competition: Evidence from the United StatesAuthor/Source: Caroline Minter-Hoxby, working paper (Harvard University, 2004) Findings: “Students' achievement generally does rise when they attend voucher or charter schools…. Public schools do respond constructively to competition [from private and charter schools], by raising their achievement and productivity…. Not only do currently enacted voucher and charter school programs not cream-skim; they disproportionately attract students who were performing badly in their regular public schools.”

The International Evidence:

Study: “How Markets Affect Quality: Testing a Theory of Market Education Against the International Evidence.” Author/Source: Andrew J. Coulson, chapter in Educational Freedom in Urban America (Cato Institute, 2004) Findings: Competitive markets of minimally regulated private schools, particularly those funded at least in part directly by parents, are usually more academically effective, more efficient, better physically maintained, and more responsive in their curricula than are traditional state school monopolies. Of the 27 comparisons of academic achievement in private and public schools that I reviewed, 20 findings showed a private sector advantage, five showed no statistically significant difference, and only two showed a public sector advantage. Of those two contrary findings, one was methodologically flawed (it ignored the fact that the tested public schools were academically selective whereas the private schools were not), and the other only applied to two newly established private schools within its private sector sample (the rest of the private schools in the sample outperformed the public schools).

Forthcoming: Also expect groundbreaking new research to be released later this year by University of Newcastle professor James Tooley, comparing market and government schools serving the poor in Africa, India, and China.

The Historical Evidence:

Title: Market Education: The Unknown History Author/Source: Andrew J. Coulson (Transaction Books, 1999) Findings: Based on numerous case studies from ancient Greece to 19 th and 20 th century America, finds that markets of competing schools have been more responsive to parental demands, and more effective in meeting those demands, than have state school monopolies. Some of the early research for this book was presented in the journal Education Policy Analysis Archives.


Racial Achievement Differences in Government and Independent Schools

Diminishing the gap in test scores between non-Asian minority students and white students has long been a national education priority. The two studies cited below suggest that expanding access to non-government schooling would be a very effective way of advancing that national goal.

Study: The Education Gap Author/Source: William G. Howell and Paul E. Peterson (The Brookings Institution, 2002) Findings: “The Education Gap is the first book to gather a significant body of data on vouchers in multiple locations, and it reveals startling new evidence that voucher programs benefit African-American students more than participants from other ethnic groups.” Participation in publicly and privately funded voucher programs significantly reduced the black/white achievement gap by improving the scores of African American students. A brief summary of the book is available on the Brookings website.

Study: “How Ideology Perpetuates the Achievement GapAuthor: Andrew J. Coulson, research report (The Mackinac Center for Public Policy, 2005) Findings: In private schools, the black/white achievement gap is nearly 30 percent smaller at the end of high-school than it is in the fourth grade. Public schools seem to have no net effect on the achievement gap – it is as big in the 12 th grade as it is in the fourth (in some subjects it is smaller, but in others it is larger). This private sector advantage exists in spite of the fact that private schools also retain far more African American students through to graduation (see below). This evidence is universally ignored by the organizations that claim to be most strongly committed to reducing the racial achievement gap.

Graduation Rates in Independent vs. Government Schools

A school system’s graduation rate is of course vitally important in and of itself. The lack of a high-school diploma generally precludes access to higher-education and puts students at a considerable disadvantage in the labor force. But in addition to its direct effects, the graduation also indirectly influences a school system’s overall test scores. Dropouts tend to be poor performers academically, so a higher dropout rate means that more low-performing students have left the test-taking pool and thus inflated the average score of the students who remain. The studies cited below reveal that public schools have higher dropout rates for African American and low-income students than do private schools. The former result is interesting in light of the achievement gap research cited above. Despite the fact that private schools retain a much higher percentage of black students through to graduation, they still seem to do a better job of diminishing the racial test score gap than do public schools. This makes the private sector’s superiority in advancing racial equality doubly impressive.

Study: “The Effects of Catholic Secondary Schooling on Educational Attainment” Author/Source: Derek Neal, The Journal of Labor Economics (1997)


Findings: After controlling for differences in family characteristics, Neal found that African American students in urban Catholic schools were nearly one-and-a-half times as likely to complete high school as similar students attending urban public schools. Neal also found that the Catholic school students were far more likely to attend college and to complete college than their public school peers (again, after controlling for family characteristics). A version of this study was also published in the journal Public Interest.

Study: “Graduation Rates for Choice and Public School Students in MilwaukeeAuthor/Source: Jay P. Greene, research report (School Choice Wisconsin, 2004) Findings: Compared Milwaukee public school graduation rates with those of low-income participants in the city’s private-school voucher program. Greene found that the voucher students were more than one-and-a-half-times as likely to graduate as the public school students [echoing Neal’s findings, above, except not limited to minority students]. More remarkable still, Greene found this graduation rate advantage existed even when he compared the voucher students to those attending Milwaukee’s elite group of academically selective public schools.

Integration in Government and Private Schools

There is some evidence that public schools may have more racially diverse student bodies in the earliest grades (particularly kindergarten) but private schools appear to be more racially diverse by the end of high-school. This variation by grade level can arguably be explained by two factors: First, in the absence of school choice programs, minority students may be somewhat overrepresented in “free” public schools and underrepresented in tuition-charging private schools because they are more likely than white students to come from lower-income families. Second, private schools may be better integrated by the end of high-school because they retain far more of their minority students through to graduation than do public schools (see above). Since public schools have such a high minority dropout rate, it stands to reason that they would become less well integrated than private schools by the 12 th grade. This explanation suggests that, under choice programs (which reduce or eliminate the integration-damping effect of family wealth disparities), private schools should be at least as well integrated as public schools, even in the early grades. That conclusion is consistent with the first study cited below. The second study cited below calls into question the way that school integration is conventionally measured, comes up with a much more meaningful measurement, and applies it in a public versus private sector comparison. The third study looks at how different school systems affect the level of segregation by income in their communities.

Study: “The Impact of School Choice on Racial Integration in Milwaukee Private SchoolsAuthor/Source: Howard L. Fuller and Deborah Greiveldinger, research report (American Education Reform Council, 2002) Findings: “Religious schools joined the Milwaukee Parental Choice Program (MPCP, the city’s voucher program) in the 1998-1999 school year. Opponents predicted that this


would increase racial segregation. In fact, four years after joining the MPCP, religious schools are more racially integrated than schools in the Milwaukee Public Schools (MPS) district…. When enrollment at both religious and non-religious [private voucher] schools is considered, [they] remain slightly more integrated than [the city’s public] schools.”

Study: “Integration Where it Counts: A Study of Racial Integration in Public and Private School Lunchrooms” Author/Source: Jay P. Greene and Nicole Mellow, conference paper (annual meeting of the American Political Science Association, 1998) Findings: “Unlike previous studies of integration in schools, our data are drawn from a setting in which racial mixing has greater meaning: the lunchroom.” By actually measuring the frequency with which students voluntarily chose to sit with members of different racial groups, Greene and Mellow provided by far the most meaningful measure of integration ever offered by education researchers. It has often been pointed out that simply counting minority and white students on a school or even classroom level is a poor measure of integration because the students of different races may still form their own racially isolated cliques. Greene and Mellow’s measure of voluntary lunchroom association is thus far superior. Using that measure, they found that private schools were significantly more integrated than public schools.

Study: “School Finance, Spatial Income Segregation And The Nature Of CommunitiesAuthor/Source: Thomas Nechyba, research report (Duke University and the National Bureau of Economic Research, 2002) Findings: “This paper focuses on the connection between the institutional set-up of education and the degree of residential income segregation implied by that set-up…. With increasing suggestions that such segregation plays a key role in long-run inequality by subjecting children in poor households to adverse neighborhood effects,… it may be every bit as important to eventual student outcomes as those factors within schools which are more typically analyzed.” “[A] purely public school system (regardless of the degree of centralization) results in substantially more spatial income segregation than a purely private system.” “The paper goes on to demonstrate how private school vouchers can further lessen residential income segregation and how these segregation results are robust to alternative assumptions about school competition ”

Other Social Effects of Market vs. Government Schooling

There is only a limited amount of contemporary U.S. evidence comparing other social effects of market and monopoly schooling, such as tolerance for political and religious differences, civic engagement, etc. This has not stopped a chorus of critics from imagining that unfettered parental choice would tear apart the fabric of our society, or from believing that state-run monopoly schooling is uniquely capable of knitting that fabric together. The authors of a 2001 RAND Corporation book 1 aptly characterize the work of these social critics:


There have not been many formal theoretical defenses of the democratic value of public education; its defenders have relied largely on rhetorical recapitulations and refinements of traditional common school notions, as well as lamentations about the insidious effects of individualistic market-oriented philosophies.

These notions and lamentations are not simply baseless, they are wrong. With few exceptions, both the contemporary American evidence and the larger body of historical and international precedents directly contradict the critics. The social effects of parent-driven education markets are superior, on the whole, to those of state-run school monopolies.

Study: “The Civic Side of School Reform: How Do School Vouchers Affect Civic Education?” Author/Source: David E. Campbell, research report (University of Notre Dame, 2002) Findings: “A survey of students currently enrolled in private schools suggests that when compared to public school students, they are more likely to engage in community service, develop civic skills in school, express confidence in being able to use those skills, exhibit greater political knowledge, and express a greater degree of political tolerance. Data from a randomized experiment of applicants to a national school voucher program confirm these results for political tolerance, but not for political knowledge. Based on these findings, it would appear that when compared to their publicly educated peers, students in private schools generally perform better on multiple indicators of their civic education. More specifically, there is no reason to think that school vouchers would inhibit the civic development of those who use them to attend private schools. On the contrary, students who switch from public to private schools show an increased level of political tolerance, what theorists stress as a fundamental component of civic education.” This paper also includes a good summary of other recent U.S. studies on the subject.


Author/Source: Richard G. Niemi and Christopher Chapman, statistical analysis report (National Center For Education Statistics, 1998) Findings: “Of the eleven indicators of civic development used in the report, private school students score notably better on four indicators. After controlling for a host of other factors…, private school students tend to have higher political knowledge scores, are more likely to have confidence in their ability to speak at public meetings, are more likely to feel as though they understand politics, and are more likely to accept the presence of controversial books in public libraries than are public school students. On the other indicators of civic development, public and private school students look similar.”

Study: “What is Public About Public EducationAuthor/Source: Paul T. Hill, research report (University of Washington and The Brookings Institution, 2000) Findings: “[D]iversity of [interracial and cross-class] contacts in school and their assumed effects on student attitudes are the core objections that many educators raise against vouchers and other programs creating options outside the district-run school system. If these objections are so important, an objective observer might expect there to be evidence that district-run schools are better than other schools at creating these contacts


and encouraging these attitudes. There is, however, little such evidence. To the contrary, most of the evidence points to the superiority of schools run by organizations other than public school systems.” “[O]penness, willingness to negotiate differences, and tolerance of others’ views… [t]hese are certainly important values for citizens of a diverse and democratic society. But the facts do not support the contention that [public] district-run schools are the only, or even the best, means of imparting those values.”

Title: Market Education: The Unknown History Author/Source: Andrew J. Coulson (Transaction Books, 1999) Findings: “Parental choice has… proven to be the best way of dealing with the differences in values and priorities that have always existed among families. Rather than trying to stamp out this natural diversity as many government-run systems have done, educational choice has allowed it to flourish, permitting families of different creeds and views to coexist without conflict…. Furthermore, there is no evidence that graduates of these [private] schools are any less tolerant or civic minded than public school graduates. “The record of government schools is appalling by comparison. Since its inception, U.S. public schooling has been a battle-zone as left-wing and right-wing activists have sought to wrest control of the system and bend it to their will. Public schools have practiced racial apartheid and forced sectarian religious practices on students, both with the approval of the courts. In the process, they have fomented anger and dissension among parents, trampled the rights of countless families, caused riots and book-burnings, and generally upset the communities they are meant to serve. Has this been an aberration? Has it only been the U.S.’s particular approach to government-run schooling that has spawned these problems? No and no. The U.S. educational system has done nothing more than inherit the woeful legacy of state schooling, just as so many other nations before it. In France, Protestant republicans and Catholic royalists treaded equally heavily on the prerogatives of families after the revolution; alternately foisting the Catholic bible on students and tearing it from their hands. In the early sixteenth century, the German state schools championed by Luther and his fellow reformers trampled the people’s growing interest in practical studies, imposing instead a classical Latin program. The list of similar abuses is long.” 2 Some of the early research for this book was presented in the journal Education Policy Analysis Archives.

1 Brian P. Gill, P. Michael Timpane, Karen E. Ross, Dominic J. Brewer, Rhetoric Versus Reality: What We Know and What We Need to Know About Vouchers and Charter Schools (RAND Institute, 2001), chapter 7.

2 Andrew J. Coulson, Market Education: The Unknown History (Transaction Books, 1999), p. 296-97.