16 February 2016

School choice increases the life chances of children from disadvantaged homes


School choice offers a number of advantages over a system where schooling is provided by public sector monopolies. Students and parents gain the opportunity to attend schools that they are happy with and, perhaps even more importantly, avoid those they are unhappy with. Competition can foster higher quality education. But does school choice really have a lasting effect on the future of pupils?

So far the answer to the latter question has been: we don’t know. Nobody has studied the long-term effects of school choice on adult outcomes in the labour market. Until now. In a recent conference held by the Centre for the Study of Market Reform of Education, Victor Lavy presented a study on this very subject. He has looked at a school choice experiment where Israeli children during the mid-1990s were given the choice of schools. In a previous study Victor has shown that school competition resulted in a number of benefits for the students, such as lower dropout rates and higher study results. Violence and classroom disruption were reduced. These positive outcomes can in part be explained by the fact that the Israeli school choice program allowed less popular schools to be closed down, whilst popular schools were given the opportunity to grow. As in other markets, the more popular better providers flourished whilst the less competent ones were crowded out.

Now 20 years have passed since the choice of schooling was made, Victor was able to carry out a follow-up evaluation of how school choice affected pupils lives in the long-term. He found that the students that were allowed to choose schools are 5 percentage points more likely to enroll in higher education compared to comparable students not given choice. Their average earnings were also 5 percentage points higher. These are quite impressive results, not least considering that school choice had been extended to students from poor socioeconomic backgrounds. It would seem, then, that school choice doesn’t only allow parents and students to choose schools they are most comfortable with, but can also through the positive effects of competition, have a significant impact on life chances.

Dr. Nima Sanandaji is a research fellow at CPS, and together with professor Stefan Fölster the author of Renaissance for Reforms (Timbro and IEA).