MARKETS IN EDUCATION EFFECTS, IMPACT AND DIVERSITY Alexandre Homem Cristo ECNAIS, Warsaw, November 18th 2011

Presentation  SYSTEM - Effects of competition  Effects on student achievement  Effects on performance of state schools  PARENTS - How parents choose their children’s school?  And why some choose private over public?  SCHOOLS – How to deal with competition?  Adaptation and efficiency  Reputation as a marketing strategy  Efficiency (cost) vs diversity: a dilemma  Diversity as a strategy  Why don’t school markets work better?

What are markets in Education?  In OECD, markets in education are a reality, even in countries where there’s no school choice.  So, no use arguing about it, we have to learn how to use them to the beneficit of students.  What are market mechanisms?  Competition  Choice  Organizational strategy

Effects on students achievement  Mixed results: a lot of research but different conclusions (because of methodology).  No universal relationship between school choice and effectiveness.  USA – Charter and Magnet schools  Major study (CREDO, 2009): 37% of charter schools have worse results than public schools, only 17% have better results.  But, performance improves along time (Saas, 2006; Booker et al., 2007).  But, tracking of lottery winners shows very positive results in Charter schools (Hoxby and Murarka, 2009; Kane et al., 2009). Same for magnet schools (Bifulco, 2009).

Effects on students achievement  It’s all about looking at details  Denmark: An average student would get better results in a Catholic or grammar school; equal results in Protestant or international schools; and worse results in free and Waldorf schools (Rangvid, 2008)  Denmark: students with a high socioeconomic produce better results in independent schools, while students with low socioeconomic produce better results in public schools (Andersen, 2008).  No consensus about positive or negative effects of school choice on student achievement. We have to look at the context.

Effects of competition on state schools  Many argued that competition caused by the independent schools would lead to improvement of state public schools. Did it happen?  “Equilibrium problem” (Loeb et al., 2011)  Mixed results in the US and UK  Positive effects in Sweden, Netherlands (primary education). Barely significant effects.  Negative effects in Denmark.

How parents choose a school  Research identifies a 2 stages-process:  Gather a set of possible choices.  Rank schools within this set by preferred criteria.  What criteria do parents mention as most important  Quality of education; Distance; Satisfaction of student (and also parents); school composition (very few)  In practice, the best criteria to predict parents’ choice is school composition.  Case-study in Chile (Elacqua et al., 2006).

How parents choose a school  Why school composition and what consequences?  Parents may interpret school composition as an indicator for quality.  What information do parents use?  It would be important to know what information parents use, but it is dificult to know which indicators had greater impact on the decision.  Formal information vs informal information.  The school’s reputation as a summary of information.  Information has less impact on school choice than it was thought.

Why parents choose private schools  Reasons vary with national context.  UK: household income and regional inequality  Australia: household income and generation effect  OECD: social class reproduction vs. choice of the outsiders  The case in Portugal.  Security and leadership in schools (trust relationship)  Early school leaving (school composition is important)  Reputation about quality (real information is scarce)

How schools deal with competition and diversity  Diversity is the main question on school choice.  School choice has opened opportunities to school diversity:  Charter and magnet schools in the US  Academies and free schools in the UK  “charter schools” in Sweden  One-to-one education (technology)  Denmark and Netherlands

How schools deal with competition and diversity  Little research on how schools respond to competition (Waslander, 2010).  2 possibilities (the school decides):  to cooperate  to adopt a competitive behavior  It means that competitive behavior is a choice of schools, not a innate condition of markets.

How schools deal with competition and diversity  One consequence of competition is an investment in marketing  Loss of efficiency  Ever more complex marketing strategies (cf. UK)  In Portugal, parents choose mainly because of reputation. How do schools use it for marketing:  Opening to local community (São João de Brito)  Creating a quality brand (Grupo GPS)  Involving parents (Colégio Planalto)

Efficiency (costs) and diversity  Efficiency = equal or higher achievement at a lower per-pupil cost.  The dilemma: diversity adds costs!  The first danger: inefficency (no better results)  The second danger: create diversity that students do not want/need.

How schools adapt to the need of diversity  Cosmetic customization  Postponing the decoupling point  Collaborations and combinations  Reducing heterogeneity  Adding resources  Digitizing learning material (e-learning)

Conclusion: why don’t education markets work better?  Information does not reach parents properly.  School leaders don’t have quality information about the school market in their area.  Marketing strategies that are more emotional than based on quality.  School choice and access to schools is harder than it would seem.  Increasing house prices around the best schools.  It is easier to invest in marketing than in quality.

Reflection  Freedom of choice means, first of all, having choices to choose from, ie diversity.  Diversity should be the main idea, not quality. Many critics of school choice question it because it has not improve quality. Is that true? We don’t really know, but we know that, at least, quality has not decreased, and that children have now more options for their education.  How do schools in different countries have developed diversity?

The end  Thank you.