Competition among Schools Benefits All Students

Published November 1, 2003

Growing evidence shows introducing market forces into the education arena benefits all students by raising achievement across the board.

The federal No Child Left Behind Act introduces two key elements of competitive markets to K-12 education: the freedom to choose among schools, and access to schools’ annual performance measures. The potential for improvement from these changes is suggested by what has happened since similar policies were introduced in Florida and the United Kingdom.

Florida A+

Under Florida’s A+ Program, every public school receives an annual grade on its academic performance. If a school receives two F grades within a four-year period, parents may send their child to another higher-graded public school or to a private school. Recent reports show parents get more involved with their schools if they have information readily available on school performance.

For example, within weeks of learning in June that their school had received two consecutive F grades, more than 15 percent of the students at Jones High School in Orlando elected to leave. Two F ratings at Jean Ribault High School in Jacksonville caused a similar loss of students. Enrollments have dropped at all 28 F-rated schools in Miami-Dade County and at all seven F-rated schools in Orange County.

Although studies show the competition generated by the A+ Program has raised achievement levels in Florida’s public schools, critics still express concerns about the most difficult-to-teach students accumulating in lower-performing schools, making those schools even worse. Evidence from the United Kingdom, however, indicates school choice produces an upward shift in achievement even in low-performing schools with high concentrations of low-income students.

Market Forces in the U.K.

In 1988, the Education Reform Act was passed to introduce “quasi-market forces” to public education in the United Kingdom. The reforms gave parents more choice over selecting their children’s schools; made school funding dependent on student enrollment; and gave individual schools more authority over deploying resources.

In addition, each school’s academic performance on national examinations was ranked annually in widely published School Performance Tables. As Lancaster University economists Steve Bradley and Jim Taylor note in a recent report from the Adam Smith Institute, “exam performance is one of the critical variables determining school choice and is therefore used by parents as a key performance indicator.”

To assess the effect of the 1988 reforms, Bradley and Taylor analyzed data for 3,000 public schools from 1992 to 2000. They concluded the reforms had created a “rudimentary” market in education, with the resulting competition among schools producing the following effects: Parents, seeking higher quality, moved their children to local schools with higher performance rankings; and academic performance levels increased across the board as schools vied to outperform one another to gain parental approval. Achievement for students from all social levels (including poor students) increased significantly over the eight-year period.

The Florida and U.K. experiences corroborate other studies showing the benefits of implementing market reforms in public schools. Markets appear to be just what our education system needs to promote effectiveness and efficiency.

Herbert J. Walberg is a distinguished visiting fellow at the Hoover Institution; a member of Hoover’s Koret Task Force on K-12 Education; University Scholar and research professor emeritus of education and psychology at the University of Illinois at Chicago; and chairman of The Heartland Institute. This article was first published by the Hoover Institution as a Hoover Essay and is reprinted here with permission.