Market Research

A Quick Guide to the

Scholarly Literature on School Choice

By Andrew J. Coulson

During a recent round of visits with print journalists, a newspaper editor told me that she
receives between five and ten times as many press releases attacking school choice as she receives
in support of it. As a corrective to that lopsided public relations onslaught, she asked if the claims
made on behalf of school choice were backed up by solid research, and if so, where that research
might be found.
In reality, the vast majority of sound empirical studies comparing competitive education
markets to state-run school monopolies give the edge to markets. A few find no significant
differences, and only the tiniest percentage find any sort of advantage to government operated
schools. Moreover, the superiority of free market education is not limited to higher student
achievement, but extends to a variety of positive social effects as well.
What follows is a short list of studies introducing that empirical literature. Since the purpose
of this comparison is to illustrate differences between traditional state-run schooling and markets
of competing private schools, public school choice programs and public charter schools are
considered incidentally or not at all. Wherever possible, research summaries are cited so as to
make the most efficient use of the reader’s time. The material is organized by topic, and links are
provided for studies (or summaries thereof) available on the Internet. The topics covered are:

• Relative academic performance of market vs. monopoly schooling

• Racial achievement differences in government and independent schools
• Graduation rates in independent vs. government schools
• Integration in government and private schools
• Other Social Effects of Market vs. Monopoly Schooling

Relative Academic Performance of

Market vs. Monopoly Schooling
Though America’s school choice debate usually revolves around a few domestic studies of
small, relatively young education voucher programs, that narrowness of focus is unnecessary. In
addition to the limited U.S. experiences, competitive education markets exist in other nations on
a much larger scale. Furthermore, a wide variety of both market-like and monopolistic education
systems have been implemented over the long, worldwide history of formal schooling. The
following studies collect and summarize a good cross section of that domestic, international, and
historical evidence.

The Domestic Evidence:

Title: “School Choice and School Competition: Evidence from the United States”
Author/Source: Caroline Minter-Hoxby, working paper (Harvard University, 2004)
Findings: “Students' achievement generally does rise when they attend voucher or charter
schools…. Public schools do respond constructively to competition [from private and
charter schools], by raising their achievement and productivity…. Not only do currently
enacted voucher and charter school programs not cream-skim; they disproportionately
attract students who were performing badly in their regular public schools.”

The International Evidence:

Study: “How Markets Affect Quality: Testing a Theory of Market Education Against the
International Evidence.”
Author/Source: Andrew J. Coulson, chapter in Educational Freedom in Urban America (Cato
Institute, 2004)
Findings: Competitive markets of minimally regulated private schools, particularly those
funded at least in part directly by parents, are usually more academically effective, more
efficient, better physically maintained, and more responsive in their curricula than are
traditional state school monopolies. Of the 27 comparisons of academic achievement in
private and public schools that I reviewed, 20 findings showed a private sector advantage,
five showed no statistically significant difference, and only two showed a public sector
advantage.
Of those two contrary findings, one was methodologically flawed (it ignored the fact that
the tested public schools were academically selective whereas the private schools were
not), and the other only applied to two newly established private schools within its private
sector sample (the rest of the private schools in the sample outperformed the public
schools).

Forthcoming: Also expect groundbreaking new research to be released later this year by
University of Newcastle professor James Tooley, comparing market and government
schools serving the poor in Africa, India, and China.

The Historical Evidence:

Title: Market Education: The Unknown History
Author/Source: Andrew J. Coulson (Transaction Books, 1999)
Findings: Based on numerous case studies from ancient Greece to 19th and 20th century
America, finds that markets of competing schools have been more responsive to parental
demands, and more effective in meeting those demands, than have state school
monopolies. Some of the early research for this book was presented in the journal
Education Policy Analysis Archives.

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 Racial Achievement Differences in
Government and Independent Schools
Diminishing the gap in test scores between non-Asian minority students and white students
has long been a national education priority. The two studies cited below suggest that expanding
access to non-government schooling would be a very effective way of advancing that national
goal.

Study: The Education Gap

Author/Source: William G. Howell and Paul E. Peterson (The Brookings Institution, 2002)
Findings: “The Education Gap is the first book to gather a significant body of data on
vouchers in multiple locations, and it reveals startling new evidence that voucher
programs benefit African-American students more than participants from other ethnic
groups.” Participation in publicly and privately funded voucher programs significantly
reduced the black/white achievement gap by improving the scores of African American
students. A brief summary of the book is available on the Brookings website.

Study: “How Ideology Perpetuates the Achievement Gap”

Author: Andrew J. Coulson, research report (The Mackinac Center for Public Policy, 2005)
Findings: In private schools, the black/white achievement gap is nearly 30 percent smaller at
the end of high-school than it is in the fourth grade. Public schools seem to have no net
effect on the achievement gap – it is as big in the 12th grade as it is in the fourth (in some
subjects it is smaller, but in others it is larger). This private sector advantage exists in spite
of the fact that private schools also retain far more African American students through to
graduation (see below). This evidence is universally ignored by the organizations that
claim to be most strongly committed to reducing the racial achievement gap.

Graduation Rates in
Independent vs. Government Schools
A school system’s graduation rate is of course vitally important in and of itself. The lack of a
high-school diploma generally precludes access to higher-education and puts students at a
considerable disadvantage in the labor force. But in addition to its direct effects, the graduation
also indirectly influences a school system’s overall test scores. Dropouts tend to be poor
performers academically, so a higher dropout rate means that more low-performing students
have left the test-taking pool and thus inflated the average score of the students who remain.
The studies cited below reveal that public schools have higher dropout rates for African
American and low-income students than do private schools. The former result is interesting in
light of the achievement gap research cited above. Despite the fact that private schools retain a
much higher percentage of black students through to graduation, they still seem to do a better
job of diminishing the racial test score gap than do public schools. This makes the private sector’s
superiority in advancing racial equality doubly impressive.

Study: “The Effects of Catholic Secondary Schooling on Educational Attainment”

Author/Source: Derek Neal, The Journal of Labor Economics (1997)

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 Findings: After controlling for differences in family characteristics, Neal found that African
American students in urban Catholic schools were nearly one-and-a-half times as likely to
complete high school as similar students attending urban public schools. Neal also found
that the Catholic school students were far more likely to attend college and to complete
college than their public school peers (again, after controlling for family characteristics). A
version of this study was also published in the journal Public Interest.

Study: “Graduation Rates for Choice and Public School Students in Milwaukee”
Author/Source: Jay P. Greene, research report (School Choice Wisconsin, 2004)
Findings: Compared Milwaukee public school graduation rates with those of low-income
participants in the city’s private-school voucher program. Greene found that the voucher
students were more than one-and-a-half-times as likely to graduate as the public school
students [echoing Neal’s findings, above, except not limited to minority students]. More
remarkable still, Greene found this graduation rate advantage existed even when he
compared the voucher students to those attending Milwaukee’s elite group of
academically selective public schools.

Integration in
Government and Private Schools
There is some evidence that public schools may have more racially diverse student bodies in
the earliest grades (particularly kindergarten) but private schools appear to be more racially
diverse by the end of high-school. This variation by grade level can arguably be explained by two
factors: First, in the absence of school choice programs, minority students may be somewhat
overrepresented in “free” public schools and underrepresented in tuition-charging private schools
because they are more likely than white students to come from lower-income families. Second,
private schools may be better integrated by the end of high-school because they retain far more
of their minority students through to graduation than do public schools (see above). Since public
schools have such a high minority dropout rate, it stands to reason that they would become less
well integrated than private schools by the 12th grade.
This explanation suggests that, under choice programs (which reduce or eliminate the
integration-damping effect of family wealth disparities), private schools should be at least as well
integrated as public schools, even in the early grades. That conclusion is consistent with the first
study cited below.
The second study cited below calls into question the way that school integration is
conventionally measured, comes up with a much more meaningful measurement, and applies it in
a public versus private sector comparison.
The third study looks at how different school systems affect the level of segregation by
income in their communities.

Study: “The Impact of School Choice on Racial Integration in Milwaukee Private Schools”
Author/Source: Howard L. Fuller and Deborah Greiveldinger, research report (American
Education Reform Council, 2002)
Findings: “Religious schools joined the Milwaukee Parental Choice Program (MPCP, the
city’s voucher program) in the 1998-1999 school year. Opponents predicted that this

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 would increase racial segregation. In fact, four years after joining the MPCP, religious
schools are more racially integrated than schools in the Milwaukee Public Schools (MPS)
district…. When enrollment at both religious and non-religious [private voucher] schools
is considered, [they] remain slightly more integrated than [the city’s public] schools.”

Study: “Integration Where it Counts: A Study of Racial Integration in Public and Private
School Lunchrooms”
Author/Source: Jay P. Greene and Nicole Mellow, conference paper (annual meeting of the
American Political Science Association, 1998)
Findings: “Unlike previous studies of integration in schools, our data are drawn from a
setting in which racial mixing has greater meaning: the lunchroom.” By actually measuring
the frequency with which students voluntarily chose to sit with members of different
racial groups, Greene and Mellow provided by far the most meaningful measure of
integration ever offered by education researchers. It has often been pointed out that
simply counting minority and white students on a school or even classroom level is a
poor measure of integration because the students of different races may still form their
own racially isolated cliques. Greene and Mellow’s measure of voluntary lunchroom
association is thus far superior. Using that measure, they found that private schools were
significantly more integrated than public schools.

Study: “School Finance, Spatial Income Segregation And The Nature Of Communities”
Author/Source: Thomas Nechyba, research report (Duke University and the National Bureau
of Economic Research, 2002)
Findings: “This paper focuses on the connection between the institutional set-up of
education and the degree of residential income segregation implied by that set-up…. With
increasing suggestions that such segregation plays a key role in long-run inequality by
subjecting children in poor households to adverse neighborhood effects,… it may be
every bit as important to eventual student outcomes as those factors within schools
which are more typically analyzed.”
“[A] purely public school system (regardless of the degree of centralization) results in
substantially more spatial income segregation than a purely private system.”
“The paper goes on to demonstrate how private school vouchers can further lessen
residential income segregation and how these segregation results are robust to alternative
assumptions about school competition..”

Other Social Effects of

Market vs. Government Schooling
There is only a limited amount of contemporary U.S. evidence comparing other social effects
of market and monopoly schooling, such as tolerance for political and religious differences, civic
engagement, etc. This has not stopped a chorus of critics from imagining that unfettered parental
choice would tear apart the fabric of our society, or from believing that state-run monopoly
schooling is uniquely capable of knitting that fabric together. The authors of a 2001 RAND
Corporation book1 aptly characterize the work of these social critics:

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 There have not been many formal theoretical defenses of the democratic value of public
education; its defenders have relied largely on rhetorical recapitulations and refinements of
traditional common school notions, as well as lamentations about the insidious effects of
individualistic market-oriented philosophies.
These notions and lamentations are not simply baseless, they are wrong. With few exceptions,
both the contemporary American evidence and the larger body of historical and international
precedents directly contradict the critics. The social effects of parent-driven education markets
are superior, on the whole, to those of state-run school monopolies.

Study: “The Civic Side of School Reform: How Do School Vouchers Affect Civic
Education?”
Author/Source: David E. Campbell, research report (University of Notre Dame, 2002)
Findings: “A survey of students currently enrolled in private schools suggests that when
compared to public school students, they are more likely to engage in community service,
develop civic skills in school, express confidence in being able to use those skills, exhibit
greater political knowledge, and express a greater degree of political tolerance. Data from
a randomized experiment of applicants to a national school voucher program confirm
these results for political tolerance, but not for political knowledge. Based on these
findings, it would appear that when compared to their publicly educated peers, students
in private schools generally perform better on multiple indicators of their civic education.
More specifically, there is no reason to think that school vouchers would inhibit the civic
development of those who use them to attend private schools. On the contrary, students
who switch from public to private schools show an increased level of political tolerance,
what theorists stress as a fundamental component of civic education.”
This paper also includes a good summary of other recent U.S. studies on the subject.

Study: “The Civic Development of 9th- Through 12th-Grade Students in the United States:
1996”
Author/Source: Richard G. Niemi and Christopher Chapman, statistical analysis report
(National Center For Education Statistics, 1998)
Findings: “Of the eleven indicators of civic development used in the report, private school
students score notably better on four indicators. After controlling for a host of other
factors…, private school students tend to have higher political knowledge scores, are
more likely to have confidence in their ability to speak at public meetings, are more likely
to feel as though they understand politics, and are more likely to accept the presence of
controversial books in public libraries than are public school students. On the other
indicators of civic development, public and private school students look similar.”

Study: “What is Public About Public Education”

Author/Source: Paul T. Hill, research report (University of Washington and The Brookings
Institution, 2000)
Findings: “[D]iversity of [interracial and cross-class] contacts in school and their assumed
effects on student attitudes are the core objections that many educators raise against
vouchers and other programs creating options outside the district-run school system. If
these objections are so important, an objective observer might expect there to be
evidence that district-run schools are better than other schools at creating these contacts

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 and encouraging these attitudes. There is, however, little such evidence. To the contrary,
most of the evidence points to the superiority of schools run by organizations other than
public school systems.”
“[O]penness, willingness to negotiate differences, and tolerance of others’ views… [t]hese
are certainly important values for citizens of a diverse and democratic society. But the
facts do not support the contention that [public] district-run schools are the only, or even
the best, means of imparting those values.”

Title: Market Education: The Unknown History

Author/Source: Andrew J. Coulson (Transaction Books, 1999)
Findings: “Parental choice has… proven to be the best way of dealing with the differences in
values and priorities that have always existed among families. Rather than trying to stamp
out this natural diversity as many government-run systems have done, educational choice
has allowed it to flourish, permitting families of different creeds and views to coexist
without conflict…. Furthermore, there is no evidence that graduates of these [private]
schools are any less tolerant or civic minded than public school graduates.
“The record of government schools is appalling by comparison. Since its inception, U.S.
public schooling has been a battle-zone as left-wing and right-wing activists have sought
to wrest control of the system and bend it to their will. Public schools have practiced
racial apartheid and forced sectarian religious practices on students, both with the
approval of the courts. In the process, they have fomented anger and dissension among
parents, trampled the rights of countless families, caused riots and book-burnings, and
generally upset the communities they are meant to serve. Has this been an aberration?
Has it only been the U.S.’s particular approach to government-run schooling that has
spawned these problems? No and no. The U.S. educational system has done nothing
more than inherit the woeful legacy of state schooling, just as so many other nations
before it. In France, Protestant republicans and Catholic royalists treaded equally heavily
on the prerogatives of families after the revolution; alternately foisting the Catholic bible
on students and tearing it from their hands. In the early sixteenth century, the German
state schools championed by Luther and his fellow reformers trampled the people’s
growing interest in practical studies, imposing instead a classical Latin program. The list
of similar abuses is long.”2
Some of the early research for this book was presented in the journal Education Policy
Analysis Archives.

1 Brian P. Gill, P. Michael Timpane, Karen E. Ross, Dominic J. Brewer, Rhetoric Versus Reality: What We Know and What We Need to
Know About Vouchers and Charter Schools (RAND Institute, 2001), chapter 7.
2 Andrew J. Coulson, Market Education: The Unknown History (Transaction Books, 1999), p. 296-97.