Framework for Engaging the Private Sector in Education

Transcription

1 SABER System Assessment and Benchmarking Education for Results Framework for Engaging the Private Sector in Education Laura Lewis and Harry Anthony Patrinos 1 11 May CfBT Education Trust and World Bank, respectively. 1

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3 Engaging the Private Sector Overview of Engaging the Private Sector Laura Lewis and Harry Anthony Patrinos 2 The private sector when engaged properly provides governments with an effective means to increase education quality and equity. We outline a framework for effective school provision regardless of the type of provider. We show how the private sector may help to support this model of effective provision, while simultaneously outlining the role of government and parents. We then analyze how countries are currently engaging the private sector and develop tools to analyze how effective this engagement is given the need to meet the key elements of effective school provision. The Organisation for Economic Co operation and Development (OECD) in its recent report on PISA 2009 defined superior education performance as high participation, high quality, high equity and high efficiency (OECD 2010). In order to achieve this superior education performance Schleicher and Stewart (2009) argue that countries must ensure education reforms promote: 1. High universal standards focus on outcomes, raise aspirations and define educational excellence 2. Accountability and autonomy responsibility to the front line to respond to local needs and strengthening accountability systems 3. Teacher professionalism recruit strong teacher candidates, prepare them well and offer ongoing professional development 4. Personalized learning ensure teachers are responsible for engaging constructively with the diversity of student interests, capacities, and socioeconomic contexts The recent World Bank publication by Patrinos et al. (2009: 4) cites evidence that engaging the private sector can: Create competition in the education market. The private sector can compete with the public sector for students. In turn, the public sector has an incentive to react to this competition by increasing the quality of the education that it provides. 2 We would like to thank our Advisory Group: Paulo Renato, former Minister of Education Brazil, and former Secretary of Education Sao Paulo state, Brazil; Jo Ritzen, President Maastricht University Netherlands, former Minister of Education Netherlands; Cecilia Maria Velez White, Harvard University and former Minister of Education Colombia; Juan Miguel Luz, Associate Dean, Center for Development Management, Asian Institute of Management and former Deputy Secretary Education, the Philippines; Carl Bistany, President of SABIS; and Geeta Kingdon, Chair of Education Economics and International Development, Institute of Education, University of London, for their input. Their comments have helped to inform this framework paper, comments not incorporated in the paper will be incorporated in the Engaging the Private Sector online toolkit. All comments and errors are our own. 3

4 Promote flexibility. Generally, the public sector has less autonomy in hiring teachers and organizing than the private sector does. Public private contracts can be a better fit between the supply of and demand for education. Flexibility in teacher contracting is one of the primary motivations for engaging the private sector Enhance efficiency when providers are selected by means of an open bidding process in which the government defines specific requirements for the quality of education that it demands from the contractor. The contracts often include measurable outcomes and clauses that specify the condition to deliver a certain quality of education, and the contractor with the best or lowest cost proposal is then chosen. This one characteristic of the contract alone can raise the quality of education. Achieve an increased level of risk sharing between the government and the private sector. This risk sharing is likely to increase efficiency in the delivery of services and, consequently, to induce the channeling of additional resources to the provision for education. Building on the key elements of an effective system outlined by Patrinos et al. (2009), OECD (2010) and the World Development Report 2004 (World Bank 2003) model of service provision, we have developed a model which describes the key elements of effective school provision. Any effective school provision must include (see Figure 1): Autonomous which can tailor teaching and learning to meet the needs of all students they serve. Schools have control over the quality of educational professionals in the school. A competitive environment where offer a range of models to meet the needs of students. Informed parents who can use both their voice and if the system permits choice to ensure the schooling supplied to their children is of the highest quality. These parents also hold the Government accountable through the political process whether it is local, regional or national. A strong accountability system, where autonomy is accompanied by responsibility. Policymakers hold all to account for the quality of their education and the accountability mechanism is transparent. 4

5 Figure 1: Overview of an effective school system The private sector in its broadest sense includes communities, non governmental organizations (NGOs), faith based organizations, trade unions, private companies, small scale informal providers and individual practitioners; all may collaborate with Government in order to attain this superior higher education quality. Though the public sector remains the dominant player in education, making high quality education accessible for all in a country requires innovative programs and initiatives in addition to public resources and leadership or vision. There are ways in which the public and private sectors can join together to complement each other s strengths in providing education services, helping countries to meet their education goals and to improve learning outcomes (Patrinos et al. 2009). These partnerships can even be tailored and targeted to meet the needs of specific communities. Autonomous Effective provision requires high quality that are given autonomy over the very elements outlined as important in delivering high quality provision, including the ability to adapt teaching and learning so that all children can learn effectively in the environment. Giving freedom to adapt their curriculum (their way of teaching), while ensuring that national learning standards are met, thus delivering the education service that meets the needs of the student population that they serve. Teachers are able to use their own autonomy over teaching methods to stimulate enthusiasm and deliver personalized learning. Teachers are able to use appropriate and regular assessments of student progress. Schools can devise local behavior policies and practices to ensure high standards of discipline (including innovative forms of alternative provision where necessary). The structure of the school day is adapted to reflect the school ethos and maximize learning time. 5

6 Several studies have outlined the importance of teachers in achieving high quality student outcomes (see, for example, Mortimore 1999; Sanders and Rivers1996; Hay McBer 2000; Hanushek 1971; OECD 2010). It is therefore important that are given autonomy over teacher resourcing, such as the ability to: Make selection decisions for education professionals locally. This provides for effective recruitment, retention and succession planning. Adapt pay and conditions to reward high quality staff Adjust class size to meet the needs of students Provide on going professional development Competition might also be limited if as a precondition for public funding governments require private to adhere to much the same input standards as are applied in public, thus reducing their operational flexibility (Lundsgaard 2002: 96). In order to ensure that the school is able to support this effective teaching and learning process, must be allowed budgetary freedom to pursue strategic priorities at the school level. This freedom to support strategic priorities at a school level can apply to both public local/district bodies and private boards. Competitive environment Private are typically granted more autonomy in order to enact this quality teaching and learning process. Allowing multiple autonomous provides a competitive environment where the types of education offered can adapt to the market. A view supported by Milton Freidman who argued that it is difficult to make a monopolistic supplier of a service pay much attention to its customers wants especially when it does not get its funds directly from its customers. The only solution is to break the monopoly, introduce competition and give the customers alternatives. It is also worth stipulating that while the public sector can be viewed as a monopolistic supplier of education provision the same could be true of any private provider. In the Netherlands where over 70 percent of students are educated in non public, the Government has ensured that public monopoly in provision is not replaced by private monopolies where large school boards control large amounts of in a locality. Today, 12 percent of primary school students in the Netherlands attend controlled by school boards with over 30 (Netherlands Primary Education Council). The Government is introducing a competition test similar to a test in other industries to ensure that any provider does not control over 50 percent of in any given region. It is this competition and alternatives in the market that have seen enrollments in private education institutions increase in starkly different contexts of Sub Saharan Africa and oil rich Arab states (see Figure 2). 6

7 Figure2: Growth in Enrollments (Percent) Source: UNESCO Institute of Statistics Greater private school competitiveness significantly raises the quality of public as measured by educational attainment, wages and high school graduation rates of public school students. In addition, there is some evidence that public react to greater competitiveness of private by paying teachers higher salaries (Hoxby 1994). In order to ensure competition is fair between public and private institutions the funding mechanism must fund each equally or close to parity. Some reduction in the level of funding may drive efficiencies. Any financial support of the private sector must be accompanied by strong Government accountability and allow informed parents to actively participate in their child s education. Many researchers have argued that this competition should be restricted to not for profit only, as for profit would put driving down costs above educational outcomes. Recent research by Hill and Welsch (2010), however, found, when looking at Michigan charter, that there is virtually no evidence that for profit are more or less likely to have students scoring at a level that exceeds Michigan standards (Level 1) or meets Michigan standards (Level 1 or Level 2). Thus, they find no evidence to suggest that the type of ownership of a charter school (profit or not for profit) affects the delivery of education services (Hill and Welsch 2010). This would support the view that ownership is less of a restriction when considering whether a provider should enter the market, that high levels of accountability should determine whether providers should enter the market and the same level of accountability should also determine whether providers should in turn leave the market if they are not delivering high quality outcomes for the students that they serve. 7

8 Informed parents Recent research by John Hattie (2008), which synthesizes 800 meta analyses, suggests that while the structure of the family is important, it is the beliefs and expectations of the adults at home that contribute most to student achievement. Parents setting high expectations for their children is one of the most important influences on a child s achievement (Hong and Ho 2005). Parents must ensure that the expectations they have for their child are reflected in the school that they attend. Parents can be informed in terms of school choice, the ability to make informed decisions on quality of different or school voice, the ability to influence the quality of schooling in their local school, when parental choice is not available. Researchers have argued that school choice only benefits the middles classes, as they are more adept at gathering and using the information available to them. Hastings and Weinstein argue that if lower income families face higher costs of gathering and interpreting statistics on academic achievement, they may choose based on easier to determine characteristics such as proximity, instead of school test scores (Hastings and Weinstein 2008). They find that providing such information significantly improves their decision making process, as evidenced by higher rates of selecting better performing. It is, therefore, essential that school choice is accompanied by mitigating factors to ensure choice does not lead to segregation. Mitigating factors could include: Non selective admission criteria that are not based on academic achievement, family background or student characteristics; when there is over subscription, admission by lottery or banding is common practice No compulsory top up fees required Non geographical zoning, so families do not have their choice limited by where they live and resources are put in place to cover increased transport costs Freely available Information about the quality of schooling; there are systems in place to disseminate information to hard to reach groups In New Orleans, where around 65 percent of students attend charter, are required to cover transport costs no matter where the child resides in the district. Other jurisdictions have used information centers to target lower income or disadvantaged groups. In New Zealand school choice has been actively leveraged by disadvantaged groups. Parents and students from Maori and Pacific Island backgrounds made considerable use of school choice when zoning was removed. Figure 3 below shows that the numbers of Maori and Pacific Island students attending non local increased substantially between 1990 and Figure 3: Distribution of Pacific Island and Maori students attending non local in New Zealand, 1990 and 1995 (percent) 8

9 Pacific Maori Source: LaRocque 2004 Researchers have argued that it is difficult to disseminate information to hard to reach groups. Studies have shown that how information is disseminated is an important consideration when trying to readdress information asymmetries. In a recent study in India, Pandey, Goyal and Sundararaman (2010) developed a systematic way to disseminate information to a broad audience about the roles and responsibilities of a school oversight committee. The intervention was carried out in 12 districts across three Indian states: Uttar Pradesh, Madhya Pradesh and Karnataka. The intervention consisted of a set of information dissemination tools delivered repeatedly to selected villages. The tools consisted of: a six minute film shown on a mobile screen a set of posters and a large wall painting a take home calendars a learning assessment booklet All of the above were distributed or shown at neighborhood meetings. The intervention was implemented at random. A baseline of understanding and student outcomes was taken pre and post intervention. The results showed there was increased awareness of roles and responsibilities, especially in higher socioeconomic groups. Impacts on learning outcomes were also detected. Avram and Dronkers (2009) also argue that studies have usually failed to distinguish between government dependent private (over 50 percent of their income comes from Government) and independent private (less than 50 percent of income comes from Government). In their recent analysis of PISA 2003 and 2006 data showed that social class factors generally figure less prominently in the choice of a private dependent school and that results are more positive for private that are government dependent (Avram and Dronkers 2009; see also Fuchs and Woessmann 2004). Patrinos (2011) in research on the Netherlands using PISA 2006 data shows that private have a positive and significant impact. The research also emphasizes the need to account for selection in order to establish the true effect of private. Private school size effects in 9

10 math, reading and science achievement are large, at 0.2 to 0.3 of a standard deviation in learning, and significant. In other words, these are large effect size effects, indicating that school choice contributes to achievement in the Netherlands. The reasons for an impact, despite the almost equal raw scores in achievement between public and private and almost 100 years existence of a system of public finance of private school choice, might have to do with the fact that it is the relatively less well off that attend private in the Netherlands. That is, the mothers of private school students are slightly less well educated than the mothers of students in public. Therefore, one possibility is that the true private school effect operates via the value it adds for students from relatively less well off backgrounds (Patrinos 2011). Accountability A strong accountability system requires Government, parents, and educational professional to work together in order to raise outcomes. The Government must play a role of ensuring that superior education quality is delivered in the. The Education Reporting Office in New Zealand and the Netherlands Inspectorate both hold public and private accountable for the same levels of educational quality. It is therefore imperative that countries implement an effective accountability system. Effective accountability systems display the following characteristics: There are clear expectations and standards for every school in the system and a transparent process for ensuring know what is expected of them There are clear lines of accountability at the teacher, school and system level; this is combined with a defined role for national and local inspectorates Quality assurance mechanisms are targeted: light touch where providers are performing well, more comprehensive where there is underperformance Inspection process is evidence driven, focusing particularly on student level data(national assessments/examinations) Inspection reports are made available to key stakeholders, including the wider public Schools are required to report to the Government on the use of funds Mok et al. when reviewing quality assurance and school monitoring systems for eight Asia Pacific countries note that, although countries are at different stages of development, the trends are from assuring minimal standards to an emphasis on continuous quality improvement; from a centralized system demanding conformity to decentralization with more individualism and openness; from a focus on academic outcomes to multi level, multidimensional reviews of the performance of the system,, teachers and students; from within system reporting to international comparisons and sharing (Mok et al : 956). The Office for Education Standards in Education (Ofsted) in England, the Education Review Office in New Zealand and the National Inspectorate in the Netherlands have all moved to a risk based inspection approach which allows which are performing well and continually improving to face less frequent inspection and which are performing below standard are inspected more frequently and rigorously. This accountability system can then supply 10

11 transparent information to parents and stakeholders. However, information is not enough: Information is an input into processes of participation and voice, which require groups of people to coordinate their actions to influence front line providers and local governments. But collective action is not automatic and depends, among other things, on the characteristics of the population involved for example, its heterogeneity (Bruns, Filmer and Patrinos 2011:75). It is this collective action which is integral in ensuring that the strong accountability system continues to demand high quality outcomes for students. Types of private sector engagement Private sector engagement cannot be seen in isolation from other education policies and Government interventions. The Government must choose how to engage the private sector to support the wider educational strategy that it is employing and ensuring the engagement is fully integrated with the strategy. For example, Korea actively engaged the private sector while simultaneously improving teachers qualifications and their professional development. The private sector played a role in creating a more egalitarian education system (see Box 1). Box 1: High School Equalization Policy, Korea, 1973 present In its leveling policy for secondary education where elementary school graduates are randomly assigned to either public or private middle in their district of residence. Private are required to meet Government requirements and are not allowed to charge tuition fees. As a result, 95% of private school costs are subsidized by government, including teachers and operations. This engagement was part of the wider education reform where the Government conducted short term training of all high school teachers, downsized unqualified and course conflicted teachers, and operated a circular transference system among public school teachers within and districts. They introduced a system that supported the deficient labor costs and operating expenses of private secondary that were financially damaged from the Equalization Policy (World Bank 2011). Korea also set up a National Diagnostic Assessment of Basic Competency (NDABC) and strengthened the National Assessment of Educational Achievement (NAEA) as measurement tools for monitoring the quality of educational achievement. These instruments were implemented to ensure that all students had attained basic competencies. The NDABC was implemented as a diagnostic tool in 2002 to measure basic competency in reading, writing and mathematics for third grade students. These measurement tools are now used locally to diagnose the progress of elementary and middle school students across different subjects. The NAEA program was introduced in Following changes in educational policy in 2002, the program has expanded its subject and grade coverage. NAEA assesses educational achievement and trends for 6th, 9th and 10th grade students in Korean language arts, social studies, mathematics, science and English. With the help of NAEA, the government monitors individual student performance levels and the accountability of public education (OECD 2010). Results from the PISA 2009 assessment show: 11

12 Korea and Finland as top performing OECD Countries Finland and Korea have among the lowest variation in student scores Korea has been able to raise its already high reading performance even further, by more than doubling the percentage of students reaching Level 5 or higher since 2000 Between 2000 and 2009 the share of top performers in reading in Korea grew by more than 7 percentage points Source: OECD 2010: Volume 5, Figure V2.2 There are a variety of ways a Government can engage the private sector. These are options a Government could use. We do not imply what type of engagement a country should use. There is no right answer. Countries should use the private sector in a way which suits their individual needs. The options open to governments include: Private : that are not owned by Government and are financed privately, typically through fees (e.g., No subsidies) Private funded :privately owned and managed (by private sector, church, religious groups, NGOs, foundation, charities, etc.) which receive funding from the Government but funding is not outlined in a contract on a per student basis 12

13 Private contracted :private contracted by the Government, where the transfer of public funds depends on the school satisfying specific conditions Private management : a private organization which operates and manages owned by the Government (e.g., Charters, Academies, Concession, etc.) Market contracted :public, private contracted or private management are implicitly contracted by the student such that the funding follows the student to the school of their choice (e.g., Vouchers) Figure 4 summarizes the differences between the main types of private sector engagement by whether the provision is publicly funded by the Government, whether there is a contract in place between the Government and the private sector and finally who owns the school. Figure 4: Summary of Types of school provision Type of school provision Publicly funded Contracted Ownership Private (no subsidies) No No Private Private funded Yes No Private Private Contracted Yes Yes, Government Private Private Management (Charters) Market contracted (Vouchers) Yes Yes, Government Government Yes Yes, Students Mixed The impact of private sector engagement There is a body of evidence from around the world that shows how effective these different models of private sector engagement have been in terms of academic performance and costeffectiveness. These evaluations have used a variety of empirical strategies to overcome any self selection issues. We highlight some of this evidence in this section. Private Schools. The evidence for the impact of private is mixed. The results of PISA 2009 suggest that there is no difference in the performance of students in public and private after controlling for their backgrounds. Another argument used is that private increase competition, thus forcing all to improve. The degree to which this happens 13

14 depends on the extent to which public view private as a threat for drawing students away. Hoxby (1994) reports a significant and positive impact from private on the quality of public schooling as measured by educational attainment, wages, and high school graduation rates of public school students. Nannestad (2004) analyzed whether private in Denmark improved the quality of local municipal and found no evidence that their existence increased competition. This is in direct contrast to Sandström and Bergström (2004) who found that increased competition arising from the existence of private in Sweden led to improvements in the standards of public. Nannestad explained this difference as being due in part to the threat posed by private to the public school system in Denmark and Sweden may be perceived very differently. As a consequence, one would expect the incentive effects of competition from private primary on actors in the public school system in Sweden to be stronger than they are in Denmark. This could be part of the explanation why competition from private primary improves quality in public in Sweden but not in Denmark (Nannestad 2004: 22). Privately Funded. McEwan (2000) evaluated the impact of privately funded in Argentina and Chile. The results showed that Catholic school attendance lowers the probability of students repeating a grade by 0.04in Argentina and 0.05 in Chile Privately Contracted. The Department of Education in the Philippines contracts with qualified private high. The department pays these a fixed amount per grantee to accept students who could not be accommodated in nearby, highly congested public high but who are willing to pay the unsupported portion of their private school tuition and all other fees. An impact evaluation of the Education Service Contracts program with these showed that students in these contracted private scored 60 points higher on the TIMSS international test than students who attended public. Even after controlling for student and family background, students at private scored 33 points higher in math (World Bank 2011). In Pakistan, Foundation Assisted Schools are low cost, privately contracted. In order to receive public funding, the must meet strict criteria. The program has had a positive impact on test scores of between and standard deviations on total test scores, particularly in math and science in grade 5 and in English in grade 8(Barrera Osorio 2010). Lefebvre and Merrigan (2009) examined privately contracted in Quebec and found that the effect of changing from a public grade school to a private high school increases the percentile rank of a student s math score by between 5 and 10 points and by between 0.13 to 0.35 of a standard deviation depending on the specifications and samples. Similarly Card et al (2010) found positive effects of catholic schooling in Ontario, their estimates suggest that extending competition to all students would raise average test scores in 6th grade by 6 8% of a standard deviation. Privately Managed. Several evaluations of publicly funded and privately operated/managed public have found them to have had positive effects. Hoxby and Rockoff (2004) showed that students who won the lottery to attend a charter school achieved scores that were 11 percentage points higher in reading and 10 percentage points higher in math than those who 14

15 did not win the lottery. Booker et al (2008) found that initially students in charter perform worse on standardized tests than their peers in public but that, after three years, the scores of charter school students catch up with those of their public school peers. Abdulkadiroglu et al 2009 study of Boston Charter Schools found that middle students who win charter lottery score almost 0.2(standard deviation) higher on English Language Arts and 0.4( standard deviation) higher in Math. Studies by Dobbie and Fryer 2009 found that attending charter as part of Harlem Children s zone, raised performance within three years by over 4/5 s.d in math, 1/3 s.d. English. Barrera Osorio (2007) reached similar conclusions for Colombia. They found that students in privately managed achieved higher test scores at the end of their basic education (grade 11) than those in public institutions. Clark (2009) found that in the UK that converted to grant maintained status achieved as much as a quarter of a standard deviation improvement in pass rates on standardized examinations Market contracted. There have also been numerous empirical evaluations of voucher schemes that have found them to have had positive effects. In Colombia, Angrist et al (2006) found that vouchers improved the test scores of both average students and those in the highest decile. Himmler (2007) found positive links between the intensity of competition that a voucher scheme creates and academic achievement in the Netherlands. Patrinos (2010) who also examined the Netherlands found private school size effects in math, reading, and science achievement of 0.17, 0.28, and 0.18 respectively. The results for Chile s voucher system however, are mixed. Gallegos (2004) found that one standard deviation in private enrollment generates about a 0.20 standard deviation in test scores and 0.24 in productivity. Bravo, Mukhopadhyay, and Todd 2010 found that the voucher reform increased the demand for private schooling and increased high school (grades 9 12) graduation rates by 3.6 percentage points, with attainment gains similar regardless of income levels. They also found that the reform increased lifetime utility and modestly reduced earnings inequality. However, Contreras et al (2008) found that, after controlling for self selection, there was no difference between public and private. Table 1: Summary of selected impact evaluation studies Type of Empirical Country and Data type and Outcome Results Engagement Strategy study year variable Private Instrumental Denmark , Grade 9 No significant 15

16 variable Nannestad 2004 United States Hoxby 1994 Sweden (Sandström and Bergström 2004) examination data National Longitudinal Survey of Youth data used from 1990 National achievement test, , student and municipal level examinations High school graduation rates No failing grades difference Significant improvement s due to private Greater competition improves the standards of public Private funded Instrumental Variable McEwan 2000 Argentina and Chile Argentina 1997 Sistema Nacional de Evaluación de la Calidad. Chile 1997 Sistema de Medición de Calidad de la Educación, Grade repetition Showed that Catholic school attendance lowers the probability of students repeating a grade by 0.04 in Argentina and 0.05 in Chile Private contracted Fixed Effects Ontario, Canada Card, Dooley and Payne 2010 Auxiliary datasets Grade 6 test scores The estimates suggest that extending competition to all students would raise average test scores in 6th grade by 6 8% of a standard deviation. 16

17 Treatment on the treated Quebec, Canada (Lefebvre and Merrigan 2009) Statistics Canada s National Longitudinal Survey on Children and Youth (NLSCY), Percentile rank and a standardized math test score with different models The effect of changing, from a public grade school to a private high school, increases the percentile rank of the math score between 5 and 10 points and by 0.13 to 0.35 of a standard deviation depending on the specifications and samples. Propensity score matching Regression discontinuity Philippines World Bank 2011 Pakistan, Barrera Osorio 2010 Basic Education Information system QAT data base TIMSS 2003 math scores QAT and independent tests Even after controlling for student and family background, students at private scored 33 points higher positive impact on test scores of between 0.36 and 0.46 standard deviations on total test scores, 17

18 Private managemen t e.g. Charters Randomization Difference in difference Propensity and matching United States, Charter, Chicago (Hoxby and Rockoff 2004) United States, Charter, Texas (Booker et al.2008) Colombia, Concession (Barrera Osorio 2007) Administrative data, cross section, , student level Administrative data, longitudinal , student level Panel at school level, two years, , student level Standardized test (math, reading), 1st 8th grades Standardized test (math, reading), 3rd 8th and 10 th grades Dropout rates, standardized test scores (math and reading), 11th grade Positive effects for lower grades: reading, 11 percentile points and math, 10 percentile points. None or a negative impact (1 4 percentile points in math) for higher grades (6 8). Initially (one year), students perform worse in charter than in public ones; after three years, students have similar scores to those in public. Positive effects on math (0.19 standard deviation), reading (0.27 standard deviation). Positive effects on dropout rates (1.7 18

19 percentage points). Some evidence of completion effects on nearby public. Randomization Boston Charter (Abdulkadiro glu et al 2009) Massachusett s Student Information management system Massachusett s Comprehensiv e Assessment System MCAS and Charter school lottery records English Language arts scores and math scores Middle students who win charter lottery score almost 0.2(standard deviation) higher on ELA and 0.4( standard deviation) higher in math Among students attending regular BPS middle, blacks score about 0:7 standard deviations below whites in language arts and 0:8 standard deviations below whites in math. Our estimated charter 19

20 school effects are large enough to reduce the black white reading gap in middle school by two thirds. Randomization Regression discontinuity Harlem Children s zone Dobbie and Fryer 2009 England Clark 2009 NYCDOE data contain student level administrative data Annual School Census, State math and ELA test scores for students in grades three through eight. Pass rates Gain over 4/5 s.d in math, 1/3 s.d. English in 3 years The typical student before entering Promise Academy was at the 20th percentile of the white distribution. After three years, the typical student is at the 45th percentile without controls and the 54 th percentile after adjusting for gender and free lunch. Allowing public high to 20

21 Market contracted e.g. Vouchers Randomization Colombia (Angrist, Bettinger, and Kremer 2006) ICFES(National exam, grade 11) records student level Standardized test scores (math, reading), completion, cost opt out of local authority control and become autonomous results in large achievement gains in learning outcomes, 4 and 6 percentage points increase in pass rates, ¼ of a standard deviation Math and reading scores generate a voucher effect of 0.2 standard deviations. Improves test scores for both average students and those over the 90th percentile. Randomization Colombia (Bettinger, Kremer and Saavedra 2010) Survey of voucher applicants carried out in Bogota by Angrist et al (2002) 1998 and Administrative College entrance exams, 8th grade completion and grade repeating Lottery winners are more likely to stay in private school, more likely to finish eighth grade and 21

22 records from the ICFES and data on their college entrance exams 2006 school survey data less likely to repeat a grade. Furthermore, voucher winners are more likely to take the college entrance examination, and their test scores are between 1 3 and 2 3 of a standard deviation higher than losers. Instrumental variable The Netherlands (Himmler 2007) National data, , student level Secondary school grades, per student spending, grade inflation Positive link between intensity of competition and academic achievement in secondary school. Instrumental variable The Netherlands (Patrinos 2009) PISA 2006 data PISA 2006 Private school size effects in math, reading, and science achievement are 0.17, 0.28, and Instrumental variable Chile (Gallegos 2004) Cross section, , student Average of the math and 1 standard deviation in private 22

23 level Spanish portions of test scores in 4th and 8th grades enrollment generates about 0.20 standard deviation in test scores and 0.24 in productivity. 1 standard deviation of number of priests per person boosts private enrollment by 8 percentage points. Simulation Chile Bravo, Mukhopadhy ay, and Todd 2010 Panel data from the 2002 and 2004 waves of the Encuesta de Protección Social survey. Graduation rates grades 9 12 and earnings It increased high school (grades 9 12) graduation rates by 3.6 percentage points and the percentage completing at least two years of college by 2.6 percentage points. Individuals from poor and non poor backgrounds on average experienced similar schooling 23

24 attainment gains. The reform also increased lifetime utility and modestly reduced earnings inequality. Instrumental variable Chile (Contreras, Bettinger, and Sepulveda 2008) Cross section, 2005, student level Selection of (parents questionnaire ), standardized test, math reading and science, 4th grade After controlling for selfselection, no differences between public and private. Source: Authors Several systems have successfully engaged the private sector to improve outcomes. These include the high income OECD countries such as the United States in the case of privately operated and managed which are known locally as Charters. Colombia s concession are also an example of successful privately managed/operated public. Korea s subsidized private have helped Korea to become one of the top performing countries on international tests. The Philippines is another success story although challenges remain (see Figure 5). Figure 5: Summary Korea, the United States, the Philippines and Colombia use of the private sector and its impact 24

25 Sources: Angrist (2010) World Bank (2009) Angrist et al. (2002, 2006) Barrera (2007) Benchmarking tools In order to engage the private sector effectively, the regulatory framework must support autonomous and a competitive environment while simultaneously ensuring all participants citizens, service providers, and governments are fully involved in a strong accountability system. Engaging the private sector in education can improve service delivery by clearly assigning responsibilities among these actors, identifying objectives and outputs, gathering information on the performance of the partnership in order to assess its progress, and ensuring enforceability of the contracts (Patrinos et al. 2009). 25

26 In order to assist policymakers in ensuring they are effectively regulating the private sector we have developed benchmarking tools which build on the frameworks outlined above. As described previously governments have a number of options of how to engage the private sector Private (No subsidies) Private funded (but not on contract) Private contracted Private management Market contracted (Vouchers or Choice) We have combined the types of private sector engagement and enrolment data to outline how OECD and partner countries currently engage the private sector. The types of private sector engagement are not exclusive but in order to represent the degree to which they are used we have devised five key questions. Answering yes to question 1 3 automatically moves a country to the right(see Figure 6) as they build sequentially. Questions 4 and 5 are non sequential so answering no to 4 does not mean a country could not also engage the private sector by using market based contracts. Key questions: 1. Are private allowed to operate? 2. Is public funding for private allowed? 3. Is there a contract that governs the use of funds transferred to non public? 4. Is the private operation and management of public permitted? 5. Does public funding follow the student to the school of their choice? We answered each of the questions using the OECD s (2010) Education at Glance school choice indicators. OECD choice indicators do not cover question four, therefore expert interviews have been used. Figure 6: Countries by type of private sector engagement and enrolment 26

27 Source: UNESCO Institute of Statistics, OECD 2010, authors estimates Figure 6 shows wide variation across countries in terms of how and the degree to which countries currently engage the private sector. Using this information we can show that the Netherlands, Belgium and Chile are the countries which actively engage the private sector the most, to improve educational outcomes. Surprisingly, even in Finland private sector engagement plays a role although the size of the role is small due to the high quality of public. The diagram also highlights the subjectivity involved in answering survey questions on the subject. The church is heavily involved in providing education in Ireland but the Irish Government considers these to be public and therefore Ireland appears to have limited engagement with the private sector. Countries are continuing to use the private sector in a number of different ways in order to improve outcomes. Increasing the private sector s role in education can have several potential advantages over the traditional public delivery of education. Whether these benefits are actually realized depends greatly on how well designed the partnership between the public and private sector is, on the regulatory framework of the country, and on the capacity of the Government to oversee and enforce its contracts and partnerships with the private sector (Patrinos et al. 2009). We have developed a tool which benchmarks a system in terms of the policy options a country has chosen to regulate the private sector. We analyze these policies to see how well each support the four key regulatory outcomes: Competition, Accountability, Autonomy and Information (see Figure 7). 27

28 Figure 7: Regulatory Outcomes Regulatory outcome Description Competition Accountability How well does the system support different players to enter the market and to what extent does it ensure there is no selection which influences the efficiency of the market? What standards are private players accountable for and what is the accountability process? Autonomy What degree of autonomy is given to in terms of curriculum, delivery and teacher policies? Information What information is available to parents and to what extent are financial contributions hindering parents in their decision making process? For each of the regulatory outcomes a country is assigned a development level for how well they are engaging the private sector. Countries progress from being Latent to Emerging to Established to Mature (see Figure 8) Figure 8: Development Levels Latent Emerging Established Mature Reflects limited engagement Reflects some good practice Reflects good practice, with some limitations Reflects international best practice, or full engagement with the private sector As described above there are different types of engagement of the private sector which vary in terms of how the private sector is contracted. In order to take this in to account we have developed a rubric to analyze how well each is currently regulated (see Annex 1). 28

29 Within each rubric there are key indicators a country must demonstrate in order to move to the next development level. These indicators are underlined. For instance, in order to be deemed to be emerging in terms of private and competition a Government must ensure it does not set standardized tuition. In order for the country to progress to Established, the Government must also not impose a cap on tuition fees. To finally progress to Mature, the Government must not restrict the establishment of for profit (see Figure 9). Each development level represents a country reducing the amount of restrictions on competition. Figure 9: Example from Rubric for Private Schools Latent Emerging Established Mature Government sets standardized tuition fees. Government does not set standardized tuition fees. Government does not set standardized tuition fees. Government does not set standardized tuition fees. Competition Government imposes cap on tuition fees. Government restricts establishment of for profit. Government imposes cap on tuition fees. Government restricts establishment of for profit. Government does not impose cap on tuition fees. Government restricts establishment of for profit. Government does not impose cap on tuition fees. Government does not restrict establishment of for profit. In order to regulate the private sector effectively, it is important that countries consider each of the four regulatory outcomes. Each is important in the overall delivery of high quality school provision. Therefore, countries must also be balanced across the four regulatory outcomes in order to progress. Overall development levels are designated depending on both the degree of balance and how well countries meet individual regulatory outcomes (see Figure 10). Figure 10: Overall Development Levels 29

30 Latent Emerging Established Mature The system is limited or does not balance each of the regulatory outcomes. The system balances each of the regulatory outcomes but the key indicators within each are not fully covered. The system balances each of the regulatory outcomes and the key indicators within each are fully covered. Equity indicators are not fully covered. The system balances each of the regulatory outcomes and the key indicators within each are covered. Equity indicators are predominantly/fully covered. An Example We have used the Netherlands as an example of how the benchmarking tool can be used to analyze policies. The Netherlands education system is based on freedom of education freedom to establish, determine the principles on which the school is based, and organize classroom teaching. In fact, the Netherlands has one of the oldest national systems based on school choice in the world. Although all in the Netherlands are government funded, most are administered by private school boards. As a result, most children in the Netherlands attend private, a trend that has been increasing over the past 150 years (Patrinos 2011, 2009; REFs; see Figure 11). Figure 11: Public and Private Secondary School Enrollment in the Netherlands (percent) Parents can choose between several, and school choice is often promoted by the Government as a way to increase competition in the school system. In the Dutch education system, education policy is determined centrally but the administration and management of 30

31 is decentralized at the school level. The central government exercises ultimate control over both public and private (Patrinos et al 2009; James 1984; Justesen 2002). Using interviews with experts in the Netherlands and publicly available sources we have benchmarked the Netherlands on how well it currently regulates the publicly funded and market contracted. The Netherlands has a mature regulatory environment, which is balanced and takes into account equity considerations. Competition is the only regulatory outcome which is not mature due to restrictions on for profit players. New players have also not been encouraged into the market (see Figure 12). Figure 12: Country Report Summary: The Netherlands Market Contracted Schools: The Netherlands Competition Information Autonomy Accountability Equal funding for public and private actively increases competition. Additional funding is also given for students with special educational needs. Competition is restricted to nonprofit organizations only. Recent reforms have not encouraged new providers into the market. Choice is not restricted by voluntary contributions; contributions by parents are not allocated to individual students. Parents have access to information to decide between on the basis of quality. Schools have freedom over curricula and the ability to control HR policies. Private also have full fiscal autonomy over their budgets. Minimum standards for students and teachers are set. The quality assurance regime is based on school need, with inspections carried out by an independent inspectorate. Established Mature Mature Mature Overall The regulatory approach is balanced and addresses equity Mature Using the framework to introduce new types of engagement 31