Is School Privatization the Answer?

Data From the Experience of Other Countries Suggest Not

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For conservatives and even some liberals, privatizing public schools has become the solution to the nation's "education crisis." Given American values about competition and choice, this sounds like a great idea, especially since the discussion is unclouded by empirical data on educational systems where there is choice and privatization. Yet such systems do exist, and--contrary to present claims--their experience suggests that voucher plans promise a lot but may actually make most children in schools worse off.

According to conservatives, the main problem with public schools is that they are public--they are managed by government bureaucracies and staffed by unionized, tenured, and largely unaccountable teachers. If only we could hire private management companies to run public school districts or, even better, get a "voucher" or "school choice" plan going that included public and private schools, they claim, students would learn more and schools would cost less, or at least cost no more than they do now.

The argument is persuasive because of our underlying values about monopolies and competition. The purpose of school choice and vouchers is to break the "monopoly" of the public sector over education and to increase competition in the educational sector. Allegedly, this would lower the cost of schooling for a given amount of pupil achievement, or increase pupil achievement (school quality) for a given cost. But beyond these claims, school-choice advocates claim that publicly subsidized private schooling would give the poor the same options as the rich, allowing low-income parents more equal opportunity to improve their children's education by sending them to private schools.

Fully subsidized private education has existed in Europe since the 19th century. In Belgium and the Netherlands, all schools, whether private or public, get an equal amount of funding from the government for each student enrolled. More recently, the Conservative government in Britain, although shying away from instituting a voucher plan, did develop an Assisted Places Scheme in the 1980's, designed to help youths from low-income families attend the high-cost independent private schools. And in 1991, the Conservative Party in Sweden implemented a nationwide voucher plan.

John Ambler's analysis of school-choice plans in Britain, France, and the Netherlands ("Who Benefits From Educational Choice? Some Evidence From Europe," Journal of Policy Analysis and Management, 1994) shows that "the primary negative effect of school choice is its natural tendency to increase the educational gap between the privileged and the underprivileged." Even though the gap already existed in public schooling, the European data suggest that providing subsidies for private education benefits higher-income families even more.

Mr. Ambler's conclusions about the equity effects of privatization in Europe are based primarily on the socioeconomic makeup of those pupils who take advantage of private education, not what happens to different young people from various social classes when they are in public and private schools. But there is a well-developed, long-operating voucher plan in Chile where pupils have been assessed regularly. The Chilean plan, begun in 1980 under the Pinochet government as part of an overall Chilean "de-governmentalization" free-market package, meets almost all the choice with equity advocates' conditions for educational reform, including mushrooming fully subsidized, privately run, completely unregulated voucher schools competing head-on for pupils with municipality-run public schools in all metropolitan neighborhoods, from middle-class suburbs to low-income barrios.

What were the results of this reform? The first was that even when parents' contributions are included, total spending on education fell quite sharply after increasing in the early 1980's. In 1985, the federal contribution was 80 percent of total educational spending, and total spending was 5.3 percent of the gross national product. Five years later, the federal portion was 68 percent of the total, and the total had fallen to 3.7 percent of the g.n.p. So private spending rose but not quickly enough to offset an 18 percent drop in real federal contributions.

The second result was that in Chile, as in Europe, those who took advantage of the subsidized private schools were predominantly middle- and higher-income families. Of families in the lower 40 percent of the income distribution in 1990, 72 percent attended municipal public schools. In the next-highest 40 percent, only 51 percent of families sent their children to public schools, with 43 percent in subsidized private school. And in the top 20 percent of income, only 25 percent had their children in public schools, 32 percent in subsidized private and 43 percent in paid private schools. So with the 1980 reform, fewer public resources went to the poor and the middle class, but the middle class and the rich were able to meet the decline with their own resources. The poor were not.

The third result was that the increases in pupil achievement predicted by voucher proponents appear to have never occurred. Scores in Spanish and mathematics from two nationally standardized cognitive-achievement tests implemented in 1982 and 1988 for 4th graders registered a national decline of 14 percent and 6 percent, respectively. According to the World Bank economist Juan Prawda, the test scores fell most for low-income students in public schools, but they also fell for low-income students in subsidized private schools. Middle-income students had small increases in test scores whether they were in public or subsidized private schools. Subsequent tests in 1990 showed increases over 1988 of 9 percent in Spanish and 11 percent in math, but this still left scores about the same as in 1982. Middle-income students averaged higher scores on these tests in private schools than in public, but lowest-income students tended to do better in public schools. Taryn Rounds's estimates of pupil achievement as a function of type of school, location, parents' education, and students' socioeconomic class using the 1990 test results confirm that lower-social-class students did better in public schools on both the Spanish and math tests, and middle-class students did better in subsidized private schools.

Because low-income parents were less able to add private contributions to the voucher amounts, private schools in Chile were apparently not that interested in doing any better than public schools with lower-income pupils. And if the declining scores in Chile's municipal public schools mean anything, it is that increased competition had a negative effect on teachers and children, and that the Chilean voucher plan contributed to greater inequality in pupil achievement without improving the overall quality of education.

Neither had the private schools cost any less, even though they paid their teachers lower salaries. Indeed, many teachers taught both in private and public schools, double shifting. Government made no effort to improve the curriculum, the quality of teaching, or the management of education, since this was supposed to happen spontaneously through increased competition among schools vying for students. It did not. Yet, the test-score results suggest that the poor still made the right choice in sending their children to municipal schools, since they do better there.

The lessons for us here in the United States are obvious, but not ones that privatization advocates want known. Voucher plans increase inequality without making schools better. Even more significantly, privatization reduces the public effort to improve schooling since it relies on the free market to increase achievement, but the increase never occurs.

What is most disturbing about this reality is that the privatization movement in this country is gaining just when pupils from all groups, especially those who have traditionally not done as well in school, are making significant achievement gains, and they are doing it because public education is getting better--without vouchers.

Vol. 14, Issue 40, Page 52

Published in Print: July 12, 1995, as Is School Privatization the Answer?
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