Study: Competition Brings Success

Published January 1, 2008

Competition fostered by a free market is good for education, according to a new study by the Milton & Rose D. Friedman Foundation.

“Monopoly versus Markets: The Empirical Evidence on Private Schools and School Choice,” by Greg Forster, Ph.D., presents rebuttals to common arguments against reform and stresses the importance of using appropriate methods of analysis when conducting research on education. Forster provides new evidence in addition to reviewing past studies on the topic.

Obvious Benefits

Jamie Story, education policy analyst at the Texas Public Policy Foundation, noted, “Free-market thinkers know intuitively that school choice will improve education for all students, but it’s important to have hard evidence when communicating our message to those who don’t yet hold this belief.”

David Kirkpatrick, senior fellow for education policy at the U.S. Freedom Foundation in Washington, DC, said it’s obvious choice works–even without a study.

“Those who maintain school choice doesn’t work need to explain why, then, is it available to all of the millions of students in higher education, none of whom are assigned to the institution they attend? Or to the estimated 1.2 million–and growing–students attending charter schools?” Kirkpatrick said.

“A survey of public school parents a few years ago found 53 percent said they live where they do so their children can attend those public schools,” Kirkpatrick continued. “If their exercising [that] choice is harming their children, perhaps some government agency should step in and reassign their children to some school whether they like it or not. After all, if compulsory assignment is good enough for low-income families, it should be required for middle- and upper-income families as well. Such discrimination based on ability to pay is clearly unfair and should not be permitted.”

Competition Is Good

Very early in the study Forster presents the issue of monopoly versus markets. “[E]ven the public school system itself would be better off it were not a monopoly,” he writes.

The study, released in October, shows competition improves all schools, public and private, on both fiscal and academic measures.

“[School choice] provides a powerful incentive for schools not to allow things to go wrong in the first place, lest they lose their students,” Forster writes.

Forster finds students in private schools make better academic gains than students in public schools. In the area of race relations there was no notable difference between the two types of schools. However, private school students were found to be less likely to drop out.

Debunking Myths

Forster’s report disputes several common myths about school choice. For example:

  • Private schools are unregulated. Untrue, Forster writes. Every state has established laws for private schools as safeguards, such as laws on health, safety, and mandatory attendance. In addition, “when parents are armed with school choice,” he writes, “they can hold schools accountable by withdrawing their children and finding better schools.” That is not the case with public schools.
  • School choice takes money from public schools. Forster says this too is untrue: “[T]he savings produced by school choice are typically much larger than any plausible estimate of fixed costs.”

Better Research Methods

The study stresses the importance of proper research methods, noting inappropriate methods of analysis produce conflicting results that can undermine the accuracy of data and create confusion in public policy.

Forster explains methodology choices can limit results or omit important factors that must be considered in order to produce reliable conclusions. Research on dropout rates, for example, is difficult to quantify, he explains, because so many factors must be considered, including race, family income, number of parents in the home, and parents’ levels of education.

Forster details the corrections that should have been made to previous studies and provides new data to reinforce or disprove those results. Unlike many studies, Forster’s relies on reports that tracked students over a long period of time, which he describes as “the gold standard for social science.”

Bailey Quinonez ([email protected]) writes from Maryland.

For more information …

“Monopoly versus Markets: The empirical evidence on private schools & school choice,” by Greg Forster, Ph.D., Milton & Rose D. Friedman Foundation, October 2007: