An idea that has gained popularity in some circles in recent years is that giving a choice to parents over where their children are educated and introducing competition in an  education ‘market’ will raise standards across the system through healthy competition and the closure of ineffective schools. Given information, parents could voice concerns, undertake improvements or move their children to other schools. Choice and its effects could improve the functioning of schools and systems, incentivize innovation and result in better student outcomes and parent satisfaction.

In the last three decades, reforms rooted in the school choice logic have been implemented in more than two-thirds of OECD countries, for instance. Across the 72 systems participating in PISA 2015, the parents of around 64% of students reported that they had at least two schools to choose from for their children.

However, a closer look at the evidence suggests that school choice often doesn’t work as it’s meant to, and can in fact increase inequalities and undermine quality education.

School choice increases inequality

The main criticisms of market-oriented policies are that they benefit wealthier schools, families and communities, increasing inequality and segregation.

Suppose government policy allows for school choice and makes data on average student learning outcomes available. These are made available in newspapers to offer a basis for comparison. Imagine parents whose school’s rating has declined. A well-off neighbourhood school attracts their interest but is oversubscribed, a frustration compounded when a better-connected neighbour secures a place. The community is left to wonder why the local government does not try harder to improve their school rather than raise expectations of better opportunities elsewhere.

Studies have repeatedly shown that school choice benefits wealthier families, while further marginalizing disadvantaged parents and schools. In Finland, school choice was primarily exercised by educated families whose children excelled academically. In the United States, while all parents used networks extensively, parents with more privileged networks used fewer information sources, relied more on educated peers and had access to more accurate information. Likewise, financial and other constraints meant that primarily poorer Nepalese parents had almost no freedom to choose and were consequently less likely to voice dissatisfaction or engage with schools to motivate improvement.

An underlying reason why school choice is flawed concerns information. The idea of school choice is based on the assumption that parents have access to and can use information to compare their child’s school to other schools to see if there’s a better option for their child. However, this information, even if accessible, may not be usable: 72% of parents in Kenya reported not knowing how to use student learning data. In any case, parents are often less interested in student test scores and more on other characteristics related to the demographic composition of a school – whether the families attending it are wealthier or belong to a particular ethnic or religious community.

School choice is meant to strengthen accountability but often concentrates disadvantaged students in disadvantaged schools. In Chile, communities with higher increases in private enrolment had greater socio-economic gaps between public and private school parents. In the United States, the most disadvantaged families have a limited choice over charter schools, which are public, independent schools that families can choose. This has led to increased segregation. What’s more, a long-term study of charter schools in Michigan showed a negative impact on student achievement and efficiency in public schools.

Vouchers sometimes work, but not always

When education is not free, financial constraints can affect the ability to choose schools. School vouchers offer funds to families to help them overcome these constraints to choose schools more freely and therefore foster competition among schools. Targeted vouchers have had success in some contexts; for example, among low income recipients in New York, vouchers have had a significant positive impact on college enrolment and degree attainment by minority students. In Sindh province, Pakistan, enrolment levels increased by 30 percentage points in villages where schools received vouchers.

However, making vouchers available may lead to greater inequality in access without necessarily improving student performance, especially if schools are allowed to charge more. Most reviews on voucher programmes in the United States indicated that vouchers did not significantly improve student achievement, and recent studies from Indiana, Louisiana and Ohio showed negative effects. Colombia’s voucher programme for private schools, which targeted low income neighbourhoods, increased private school enrolment and improved voucher recipients’ achievement levels and graduation rates. However, the voucher covered only just over half the average cost, effectively barring those who could not afford the balance from the benefit. In Chile, communities that saw higher increases in private enrolment (often due to vouchers) had lower public school test scores, greater gaps in test scores between elite private schools and public schools, and greater socio-economic gaps between public and private school parents. Schools were also provided incentives that were linked to grade 4 learning outcomes, which encouraged schools to game the system and not admit students of low socio-economic status in order to keep their results high.

All these concerns indicate that governments should be extremely cautious in pushing forward reforms that promote an education ‘market’, as school choice may actually have negative effects on the quality and equity of education.

Download the 2017/8 GEM Report, Accountability in Education: Meeting our commitments.

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