Should we have profit-making schools?

An incredibly well-balanced and informative article on the topic, profit-making schools.

An excerpt from Simon Burgess: “So profit-making is pointless at best: under the current market set-up, improvements in attainment would not make money (so would not happen) with profit-making schools, and cutting costs would make money but would either reduce attainment or leave it unchanged…..Profit making in schools would either solve all schools’ problems nor signal the end of civilisation; the issue provokes strong feelings, but largely misses what should be the central policy concerns. Big gains in levels of attainment depend on raising average teacher effectiveness and big gains in equity depend on weakening the importance of proximity as an admissions rule and on changing the allocation of effective teachers across schools. None of these would be strongly or directly affected by for-profit schools. However, there are certainly merits in piloting policies that link school’s revenue per student to the progress of that student, and incentivising cost reductions through keeping the surplus in the school.”

CMPO Viewpoint

Author: Simon Burgess

Should we have profit-making schools?

Profit-making schools have returned to the education debate in England. This is an emotive issue for many, but an economic analysis is useful in defining the real issues.

There are some simple claims that can be quickly dealt with.

  • “Education is far too important to be left to the mercy of profit-making companies.” Education is undoubtedly very important, for long-run growth, for social mobility, and for personal well-being. But think about possibly the most elemental of human needs, the production and distribution of food. While this is regulated by government, we are happy to leave all the decisions to profit-making companies. No-one seriously advocates the nationalisation of food.
  • “It just won’t work.” It clearly does at a general level. Countries around the world, including those with well-regarded education systems such as Sweden, allow profit-making schools.
  • “No-one should make money out of education.”

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