Does privatisation enhance education? Does public education improve under competitive conditions? This paper from Stanford and Illinos Universities looks to gain insights into these issues by examining school systems where vouchers have been implemented on a large scale and where private school supply has increased.The best example of voucher use worldwide is Chile.
Vouchers were introduced from 1980 onwards, under this scheme the Ministry of Education in Chile began distributing monthly payments based on a fixed voucher multiplied by the number of students enrolled.
Vouchers are suggested to improve education and make parents feel better off because they have a choice of where to send their children to school. Vouchers are supposed to accomplish:
- Choice: They provide this for consumers and also for privately run schools. The most desirable schools from a consumers’ point of view may be those that have long waiting lists, hence the best opportunity to exercise choice.
- Competition: A gain in effectiveness and efficiency is expected to result from competition between alternative providers. However, it is difficult to separate positive from negative effects on student performance due to skimming off high achievers.
- Academic efficiency: Empirical evidence of improved student outcomes specifically student performance in privately run schools, is important to the argument that they make consumers better off. The gain for low-income students is especially crucial given current privatisation politics.
- Equality effects: Voucher need is greatest amongst low-income groups, for whom choice is most limited. However, vouchers could produce greater inequality of access to educational quality. Yet this may be accepted as the price of improving educational performance for some.
The study neither refutes nor provides strong support for the notion that competition will lead to improvements in the quality of public schools. Instead, it suggests that effects of competition may exist in some contexts, but not in others. The nationwide voucher plan experience of Chile suggests these conclusions:
- ‘Marketising’ education will increase school choice for a proportion of parents, but is unlikely to improve educational delivery for more than a small fraction of the school population.
- Vouchers increase inequality in the school system mainly through peer effects.
- The Chilean results are generally consistent with much smaller voucher experiments and other choice plans in the United States.
- Even in the best of cases, fifteen years of intense competition improved achievement in public schools by only a small amount.
- Privatisation solves neither the gap in achievement between low-income children and high-income children nor that in access to high quality schools.
- With vouchers, the vast majority of low-income children still get less than adequate education, even though some will switch schools.
