Growing evidence shows that introducing market forces in education benefits all students by raising achievement across the board.
The federal No Child Left Behind Act introduces two key elements of competitive markets to K–12 education: the freedom to choose among schools, with access to schools annual performance measures, and the potential for change, as suggested by what has happened since similar policies were introduced in Florida and the United Kingdom.
Under Florida's A-Plus Program, every public school receives an annual grade on its academic performance. If a school receives two F grades within a four-year period, parents may send their child to another higher-graded public school or to a private school. Recent reports show that parents get more involved with their schools if they have information readily available on school performance.
For example, within weeks of receiving two consecutive F grades this June, more than 15 percent of the students at Jones High School in Orlando elected to leave the school. Two F ratings at Jean Ribault High School in Jacksonville caused a similar percentage of students to leave. Enrollments have dropped at all twenty-eight F-rated schools in Miami-Dade County and at all seven F-rated schools in Orange County.
Although studies show the competition generated by the A-Plus Program has raised achievement levels in Florida's public schools, critics still raise concerns about the most difficult-to-teach students accumulating in lower-performing schools and such schools becoming even worse. Evidence from the United Kingdom, however, indicates that school choice produces an upward shift in achievement even in low-performing schools with high concentrations of low-income students.
In 1988, the Education Reform Act was passed to introduce "quasi-market forces" to public education in the United Kingdom. The reforms gave parents more choice over selecting their children's schools; made school funding dependent on student enrollment; and gave individual schools more authority over deploying resources.
In addition, each school's academic performance on national examinations was ranked annually in widely published School Performance Tables. As Lancaster University economists Steve Bradley and Jim Taylor note in a recent report from the Adam Smith Institute, "exam performance is one of the critical variables determining school choice and is therefore used by parents as a key performance indicator."
To assess the effect of the 1988 reforms, Bradley and Taylor analyzed data for 3,000 public schools from 1992 to 2000. They concluded that the reforms had created a "rudimentary" market in education, with the resulting competition among schools producing the following effects: parents, seeking higher quality, moved their children to local schools with higher- performance rankings, and academic performance levels increased across the board as schools vied to outperform one another to gain parental approval. The results showed that students from all social levels (including poor students) increased significantly over the eight-year period.
The Florida and UK research corroborates other studies showing the benefits of implementing market reforms in public schools. Markets appear to be just what our education system needs to promote effectiveness and efficiency.