Competition From Private Schools Boosts Achievement For Both Private And State School Students

Countries with a higher proportion of students enrolled in private schools score higher on internationally comparable exams taken by 15 year olds. New cross-national research published in the August 2010 Economic Journal shows that competition from private schools improves achievement for both state and private school students while decreasing overall spending on education.

For example, a 10% increase in enrolment in private schools improves a country”s mathematics test scores in PISA (Programme for International Student Assessment) by almost half a year”s worth of learning. A 10% increase in private school enrolment also reduces total educational spending per student by over 5% of the OECD average.

No previous study has systematically measured the causal impact of private school competition by looking at variation across countries. Using data from 29 OECD countries, Harvard University”s Professor Martin West and University of Munich economist Professor Ludger Woessmann find that competitive pressures from private schools increase the productivity of the school system as a whole.

The researchers comment:

”Our results suggest that students in state-run schools profit nearly as much from increased private school competition as do a nation”s students as a whole.

”Spending on education is also reduced, suggesting that school systems are more efficient if they are more competitive.”

The size of the private school sector ranges widely across countries. In the Netherlands, more than three quarters of 15 year olds attend privately operated schools. Private school shares in Belgium, Ireland, and Korea are well above one half.

By contrast, the share of students in privately operated schools in Greece, Iceland, Italy, New Zealand, Norway, Poland, Sweden and Turkey is below 5%. Just over 6% of 15 year olds in the UK and United States attend private schools.

West and Woessmann analyse PISA data on the mathematical, scientific and reading literacy of nearly 220,000 students in 29 OECD countries. They also use PISA data on students” background and the characteristics of each student”s school, including resource levels and whether the school is state or private.

The researchers” innovative approach to measuring the causal effect of competition between private and state schools uses the fact that the amount of competition in education today has in large part been influenced by the Catholic church”s efforts in the nineteenth century to construct an alternative school system wherever the state religion was not Catholic.

This historical period created a ”natural experiment” that led to varying degrees of state and private schools in contemporary educational systems. The researchers estimate the statistical relationship between the size of the Catholic population in 1900 and the extent of private schooling today and use this estimate to isolate the causal effect of private school competition on contemporary student achievement.

Their results confirm that countries with larger shares of Catholics but without an official Catholic state religion in 1900 have significantly larger shares of privately operated schools in 2003 and their students perform significantly better on the PISA test:

  • A 10% increase in enrolment in private schools improves PISA mathematics test scores by almost half a year”s worth of learning.
  • For science and reading, a 10% increase in private school enrolment generates an improvement of more than one fifth of a year”s worth of learning.
  • In the case of education spending, a 10% increase in the private school enrolment leads to a $3,209 reduction in total education spending per student up to the age of 15 – more than 5% of the average across OECD countries.

West and Woessmann conclude:

”Catholic resistance to state-run schooling in many countries helped create institutional configurations that continue to spur student achievement.”

‘”Every Catholic Child in a Catholic School”: Historical Resistance to State Schooling, Contemporary Private Competition and Student Achievement Across Countries” by Martin West and Ludger Woessmann is published in the August 2010 issue of the Economic Journal.


Martin West

Harvard Graduate School of Education | +1-617-496-4803 | martin_west@gse.harvard.edu

Ludger Woessmann

University of Munich, the Ifo Institute, CESifo and IZA | woessmann@ifo.de