Equity Is Elusive in Educational Markets

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Mounting frustration and anger over the glacial improvement of public schools in this country are renewing interest in an open educational marketplace. Yet despite the passionate arguments already heard about this controversial issue, both pro and con, the debate is expected to intensify because of a fundamental misunderstanding of the concept.

When the economist Milton Friedman first issued his radical proposal in 1955 to disentangle government funding of education from the operation of schools, he was motivated more by philosophy than by disaffection with the status quo, because public schools in the United States during the era in question enjoyed widespread taxpayer approval.

In the more than half a century since, however, that support has slowly eroded. Seizing on the dissatisfaction identified in numerous polls, supporters of Friedman’s model have attempted to make their case about the advantages that will accrue to all stakeholders. At the same time, opponents have countered that cities in the United States and countries abroad where a putative market system is in place have not demonstrated the benefits claimed.

Which side is right?

It’s impossible to know, because the domestic and international education programs cited by both sides to bolster their respective positions lack most or all of the key elements of an authentic market system, despite their assertions to the contrary. As a result, what purports to be a system of unfettered choice and competition in actuality falls short of the mark.

In an open marketplace, consumers possess ease of entry and exit. They immediately signal their satisfaction or dissatisfaction by their buying behavior. But in the case of schools, the ability to do the same is expensive and disruptive. Certainly parents can sell their home or rent an apartment in an area to meet residency requirements for enrollment in a coveted district. But the price paid financially, socially, and psychologically is steep.

Even when parents act decisively, there’s no assurance that they’ll be able to enroll their children in desirable neighborhood schools because supply and demand in education are often out of synch. The New York Times, on March 24 of this year, for example, reported that many parents on the posh Upper East Side of Manhattan, who understandably assumed that they would be able to send their children to a school located just a few blocks from their residences, were denied admission for kindergarten this coming fall. Overcrowded classrooms caused by parents who pulled their children out of expensive private schools because of the financial crisis were largely to blame, coupled with a new citywide policy requiring parents to sign up for classroom spaces earlier than ever.

Moreover, product differentiation in education is at best minimal. Even if parents are guaranteed the right to choose, similarities between schools tend to overwhelm their differences within the same community. That doesn’t mean parents can’t find schools to meet the unique needs and interests of their children, but the schools are often oversubscribed, expensive, or remote.

Vouchers can help, of course, but they rarely cover the full cost of tuition and incidental expenses. For poor parents with numerous children, the difference effectively shuts them out. That’s why the claim that choice allows children to flee execrable schools is valid in theory, but not always in practice.

Most troubling, however, is that not all children have parents who are involved enough in their education to take advantage of choice. Concern about food, clothing, and shelter takes precedence over schooling. These are the same parents who never respond to requests to attend conferences about their children’s learning. It comes as no surprise, therefore, that they don’t participate in lotteries or other forms of choice.

Reformers learned this lesson about differences in parental involvement in the early 1990s, when New Zealand instituted a program called Tomorrow’s Schools. Attendance zones were abolished, and all parents were allowed to send their children to any school they wished at government expense.

In one fell swoop, New Zealand put into place the rudiments of an open educational marketplace. The problem was that the most sophisticated parents acted quickly, resulting in the best schools’ rapidly filling up. Disadvantaged children, without anyone in their corner, were forced by default to return to their schools of origin, which became significantly more polarized along racial and ethnic lines than before.

Insisting on the presence of all market features in today’s reform movement will please the approach’s supporters, but is unlikely to make a difference in the final analysis if equity is paramount. The principles of education and the laws of economics don’t mix. But that’s a lesson we still haven’t learned.

Vol. 28, Issue 36

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