Public and Private Schools How management and funding relate to tHeir Socio-economic Profile Programme for International Student Assessment Public and Private Schools How management and funding relate to tHeir socio-economic profile This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Please cite this publication as: OECD (2012), Public and Private Schools: How Management and Funding Relate to their Socio-economic Profile, OECD Publishing. http://dx.doi.org/10.1787/9789264175006-en ISBN 978-92-64-17491-7 (print) ISBN 978-92-64-17500-6 (PDF) The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. 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Foreword the oecd’s Programme for international student assessment (Pisa) represents a commitment by governments to monitor student achievement within an internationally agreed framework. in the decade since its first report was issued, Pisa has become the most comprehensive and rigorous student assessment programme in the world. the countries participating in Pisa together make up close to 90% of the global economy. Pisa 2009 focused on reading literacy, although students’ skills in mathematics and science were also assessed. this report uses data from the PISA 2009 Database and Education at a Glance 2011: OECD Indicators to investigate public and private involvement in managing and funding schools, and examines how these types of involvement are related to socio-economic stratification between publicly and privately managed schools. it also shows that in those countries with less socio-economic stratification between publicly and privately managed schools, privately managed schools receive higher proportions of public funding. however, the results of the analyses do not suggest that providing more public funding for privately managed schools will reduce stratification between publicly and privately managed schools in all countries. the mechanisms used to finance privately managed schools with public funds vary across school systems, and they may also be related to stratification in different ways. furthermore, other school characteristics, such as a school’s student-admittance criteria, academic performance, policies, practices and learning environment are also partly related to stratification. these aspects, which are not related to funding, also need to be considered when devising policies to reduce stratification between publicly and privately managed schools. this publication was prepared at the oecd directorate for education with the support of the countries and economies participating in Pisa and various experts. this publication was drafted by miyako ikeda and soojin Park in collaboration with guillermo montt and anna Pons. marilyn achiron, elizabeth del bourgo, and elisabeth villoutreix provided editorial support and oversaw production. alejandro gomez Palma, giannina rech, andreas schleicher and Jean Yip reviewed and offered many helpful suggestions. fung-Kwan tam conducted the layout design. our special thanks to mark berends, university of notre dame and henry m. levin, teachers college, columbia university for their analytical guidance and critical insights. the development of the report was steered by the Pisa governing board, which is chaired by lorna bertrand (united Kingdom). the report is published on the responsibility of the secretary-general of the oecd. Lorna Bertrand Barbara Ischinger chair of the Pisa governing board director for education, oecd 3 Public and Private schools: how management and funding relate to their socio-economic Profile © OECD 2012 Table of Contents ExEcutivE Summary ........................................................................................................................................................................................................................7 introduction .....................................................................................................................................................................................................................................9 rEadEr’S guidE ..................................................................................................................................................................................................................................15 ChapTEr 1 managEmEnt and Funding .................................................................................................................................................................17 management of schools .....................................................................................................................................................................................................................18 Funding for schools .................................................................................................................................................................................................................................20 ChapTEr 2 aSpEctS oF Socio-Economic StratiFication ...................................................................................................................25 How socio-economic stratification varies across countries .....................................................................................................................................26 Socio-economic stratification and overall performance ............................................................................................................................................27 Some system characteristics and socio-economic stratification ...........................................................................................................................28 Socio-economic stratification before and after accounting for public funding .........................................................................................30 ChapTEr 3 ScHool voucHErS and StratiFication ..................................................................................................................................33 School vouchers ......................................................................................................................................................................................................................................34 various voucher systems and socio-economic stratification ...................................................................................................................................35 ChapTEr 4 otHEr ScHool cHaractEriSticS rElatEd to StratiFication ..........................................................................39 School-admittance criteria ..............................................................................................................................................................................................................40 parental choice for better education ........................................................................................................................................................................................42 concluSion and policy implicationS ................................................................................................................................................................47 Country Box A: A brief history of public and private involvement in schools in Ireland ....................................................................49 Country Box B: A brief history of public and private involvement in schools in Chile .........................................................................53 Country Box C: A brief history of public and private involvement in schools in the Netherlands ...............................................59 annEx a tEcHnical Background ...........................................................................................................................................................................63 annex a1: construction of reading scales and indices from the student, school and parent context questionnaires ..........64 annex a2: technical notes on preliminary multilevel regression analysis for performance ............................................................70 annex a3: standard errors, significance tests and subgroup comparisons...................................................................................................76 annEx B data taBlES ................................................................................................................................................................................................................77 5 Public and Private schools: how management and funding relate to their socio-economic Profile © OECD 2012 Table of ConTenTs Box box 1.1 Pisa 2009 questions: public and private involvement in managing and funding schools ..............................................................................18 Figures figure 1.1 Public and private management of schools ....................................................................................................................................................................19 figure 1.2 how school autonomy, resources, climate and performance differ between publicly and privately managed schools........................20 figure 1.3 Public funding for schools ...................................................................................................................................................................................................21 figure 1.4 Public and private involvement in managing and funding schools ........................................................................................................................22 figure 2.1 how socio-economic stratification varies across countries.......................................................................................................................................26 figure 2.2 attaining both small stratification and high performance is possible .....................................................................................................................27 figure 2.3 relationship between stratification and public funding for privately managed schools ..................................................................................29 figure 2.4 how socio-economic stratification varies across countries, before and after accounting for the proportion of public funding for schools .................................................................................................................................................................................................................................30 figure 2.5 countries with and without stratification, before and after accounting for the proportion of public funding for schools ....................31 figure 3.1 various voucher systems ......................................................................................................................................................................................................34 figure 3.2 stratification by type of vouchers .......................................................................................................................................................................................36 figure 4.1 how stratification varies across countries, after accounting for various school-admittance criteria ............................................................41 figure 4.2 the likelihood that socio-economically advantaged students will attend privately managed schools ........................................................43 TaBles table a1.1 levels of parental education converted into years of schooling ..............................................................................................................................67 table a2.1 descriptive statistics of explanatory and background variables ...............................................................................................................................71 table a2.2 relationship between public and private involvement in schools and performance in reading ...................................................................73 table b1.1 Public and private involvement in managing schools .................................................................................................................................................78 table b1.2 school autonomy, resources, climate and performance, by publicly and privately managed schools........................................................79 table b1.3 Public and private involvement in funding schools .....................................................................................................................................................82 table b1.4 Public and private involvement in funding schools, by publicly and privately managed schools ................................................................83 table b2.1 socio-economic stratification between students who attend publicly and privately managed schools ......................................................84 table b2.2 socio-economic stratification, by lower and upper secondary education............................................................................................................85 table b2.3 summary of stratification and countries’ socio-economic and education characteristics ...............................................................................86 table b2.4 correlation between stratification and various system characteristics ...................................................................................................................86 table b2.5 relationships between stratification and various system characteristics ...............................................................................................................87 table b2.6 socio-economic stratification, by the proportion of public and private funding for schools ..........................................................................88 table b2.7 socio-economic stratification, after accounting for school funding .......................................................................................................................89 table b3.1 financial incentives for parents to choose their child’s school (2009) ...................................................................................................................90 table b3.2 school vouchers only available for students from socio-economically disadvantaged backgrounds (2009) ............................................91 table b3.3 relationships between stratification and various voucher systems .........................................................................................................................92 table b4.1 student socio-economic background, by schools with various school-admittance criteria............................................................................94 table b4.2 various school-admittance criteria, by school type .....................................................................................................................................................96 table b4.3 socio-economic stratification, after accounting for the proportion of public funding for schools and various school-admittance criteria ...................................................................................................................................................................................................98 table b4.4 relationship between student socio-economic background and school autonomy, resources, climate and performance ...............100 table b4.5 likelihood that socio-economically advantaged students will attend privately managed schools ............................................................101 table b4.6 likelihood that socio-economically advantaged students will attend privately managed schools, after accounting for the proportion of public funding for schools ........................................................................................................................................................102 6 © OECD 2012 Public and Private schools: how management and funding relate to their socio-economic Profile Executive Summary in recent years, an increasing number of education systems in oecd and partner countries have welcomed the involvement of private entities, including parents, non-governmental organisations and enterprises, in funding and managing schools. Part of the interest in broadening the responsibility for schools beyond the government is to provide greater choice for parents and students and to spur creativity and innovation within schools, themselves. this report examines how private involvement in managing and funding schools is related to socio-economic stratification between publicly and privately managed schools. stratification, which, in this report, means creating “classes” of students according to their socio-economic backgrounds, can lead to unequal educational opportunities and outcomes, and can undermine social cohesion. students who attend schools that have access to more resources and offer a supportive learning environment are more likely to perform better than students who attend schools with neither of these advantages. how children perform in school can have a great impact on their prospects in life later on. this report examines whether those countries that manage to have low levels of socio-economic stratification in their education systems – and thereby maximise equity and social cohesion – can, at the same time, have efficient – that is, high-performing – education systems as well. why do more advantaged parents tend to send their children to privately managed schools than disadvantaged parents do? one reason could be that parents believe that these schools offer a better education, an environment more conducive to learning, additional resources, and better policies and practices; and advantaged parents are more informed or aware of the differences in quality across schools. indeed, results from Pisa show that, in most countries, privately managed schools tend to have more autonomy, better resources, and perform better on the Pisa reading scale than publicly managed schools. however, Pisa finds that, in all countries, privately managed schools seem to attract advantaged students largely because their student bodies are advantaged. indeed, in most pISa-participating countries and economies, the average socio-economic background of students who attend privately managed schools is more advantaged than that of those who attend public schools. why, then, is socio-economic stratification more pronounced in some countries than in others? results show that while the prevalence of privately managed schools in a country is not related to stratification, the level of public funding to privately managed schools is. in sweden, finland, the netherlands, the slovak republic and the partner economy hong Kong-china, principals in privately managed schools reported that over 90% of school funding comes from the government, while in slovenia, germany, belgium, hungary, luxembourg and ireland, between 80% and 90% of funding for privately managed school does. in contrast, in the united Kingdom, greece, the united states, mexico, and the partner countries and economies albania, Kyrgyzstan, tunisia, uruguay, dubai (uae), Qatar and Jordan, 1% or less of funding for privately managed schools comes from the government; in new Zealand and the partner countries and economies Panama, brazil, chinese taipei, Kazakhstan, Peru and shanghai-china, between 1% and 10% does. In those countries where privately managed schools receive higher proportions of public funding, there is less stratification between publicly and privately managed schools. across oecd countries, 45% of the variation in stratification can be accounted for by the level of public funding to privately managed schools; across all participating countries, 35% of the variation in stratification can be accounted for in this way. 7 Public and Private schools: how management and funding relate to their socio-economic Profile © OECD 2012 exeCuTive summary there are many ways of providing public funding to privately managed schools. one way is through vouchers and tuition tax credits, which assist parents directly. the two types of voucher systems considered in this report, universal voucher systems, in which vouchers are available to all students, and targeted voucher systems, in which vouchers are provided only to disadvantaged students, have different effects on socio-economic stratification. if school vouchers are available for all students, they could help to expand the choice of schools available to parents and promote competition among schools. school vouchers that target only disadvantaged students address equity issues, but they have a limited effect on expanding school choice and promoting competition among schools overall. an analysis of Pisa data shows that universal voucher systems tend to have twice the degree of stratification as targeted voucher systems. however, an analysis of Pisa findings also shows that providing more public funding for privately managed schools will not necessarily eliminate stratification between publicly and privately managed schools in all countries. in some countries, socio-economic stratification is mainly explained by the fact that parents must pay more to send their children to privately managed schools; but in other countries, school fees do not explain stratification completely. other school characteristics, such as a school’s student-admittance criteria, academic performance, policies, practices and learning environment are also partly related to stratification. these aspects, which are not related to funding, also need to be considered when devising policies to reduce stratification between publicly and privately managed schools. crucially, pISa results also show that those countries that have low levels of socio-economic stratification also tend to have better overall performance. that means that policy makers – and ultimately parents and students – do not have to choose between equity/social cohesion and strong performance in their school systems. the two are not mutually exclusive. 8 © OECD 2012 Public and Private schools: how management and funding relate to their socio-economic Profile