Decade-old, market-based plan swells enrollment at 'best’ schools, sucks students from low-performers, forcing state to intervene

A school choice plan instituted in New Zealand and similar to conservative voucher proposals in the United States polarized student enrollment patterns by race, ethnicity, socioeconomic status and student performance, according to new research.

"Parents were using the mix of race and socioeconomic status as a proxy for quality of schools," said Helen Ladd, co-author of "When Schools Compete: A Cautionary Tale."

As a result, minority students, poorer students, and those most difficult to teach became increasingly concentrated in certain schools, said Ladd, a professor of public policy and economics at Duke University’s Terry Sanford Institute. The performance gap among schools on New Zealand’s exit exams for 15-year-olds increased significantly.

Ladd and her husband, Edward Fiske, a longtime education editor at the New York Times, spent six months in New Zealand in 1998 examining that country’s decade-old market-based education reforms. They chose New Zealand because the country is similar in size to a U.S. state; because it has similar social, cultural and political traditions; and because it has a similar minority population.

The authors found that New Zealand’s experiment with self-governing schools in a competitive environment produced some positive results. Schools clearly enjoy their new authority to make policy decisions, such as the hiring and firing of teachers and principals, they said. They described the autonomy as similar to U.S. charter schools.

Yet, Fiske said: "The concept of an educational marketplace presumes that some competitors will succeed and others will fail. New Zealand’s experience with Tomorrow’s Schools thus raises the question of whether it is appropriate, practically as well as morally, to organize public education in such a way that, when the system is operating the way it is designed to function, there will be failures as well as successes among both institutions and individuals."

The authors concluded that charter schools are most effective when they remain limited in number and do not become the norm.

Parents, meanwhile, have embraced the opportunity to select what school their child will attend. The option was granted, Ladd said, in the hopes of increasing parental participation in and support for public education.

This ability to choose, however, quickly "flipped from parental choice to a system where schools do the choosing," said Fiske.

Schools with a higher decile rating - which tracked with race and socioeconomic status of students - "quickly became oversubscribed, which meant, for all practical purposes, there was no parental choice," he said. The higher caliber schools were able to select their student population, similar to the ability private schools in the United States would have under current voucher proposals.

Enrollment at some low decile schools declined by as much as 50 percent to 60 percent, they found. In the absence of a choice plan, that decline would have been less than 15 percent. Enrollment at high decile schools increased by up to 20 percent; without choice the increase would have been less than 10 percent in most schools.

"Young people were less likely to be exposed to people of different backgrounds and ethnicities, and that’s pretty important in a democracy," said Henry Levin, director of the Center for the Study of Privatization at Columbia University.

But parents were not wrong to use the decile ranking to judge schools, said Ladd.

"A school with a high decile ranking ends up with the best teachers, who like to teach motivated students," she said. "Also there is the peer effect, they wanted their children to be around highly motivated peers. But that doesn’t make it a rational thing for the system as a whole."

Political pressures eventually forced New Zealand’s Ministry of Education to intervene and provide assistance to schools that had become "losers" in the educational marketplace, the authors said. Senior education officials conceded to Fiske and Ladd that the system of self-governing schools in a competitive marketplace did not work for 10 percent to 30 percent of the schools.

The idea that low-performing schools would "be forced" to improve to compete - the idea behind Florida’s statewide voucher program and one supported by presidential candidate George W. Bush—never met with success.

"There is little doubt that parental choice significantly exacerbated the problems faced by many schools serving concentrations of difficult-to-teach students. These schools enjoy the same operational flexibility as other self-governing schools, and they share the same incentives as other schools to improve the quality of their programs in order to attract more students and more funding. In some cases they appear to be well managed. Nevertheless, they find themselves unable to compete successfully in the academic marketplace," the authors concluded.

Ladd says it is additional assistance for low-performing schools, not abandonment by parents and of the system as a whole, that spurs improvement.

"Is it really the kids leaving, or is it the schools getting an ‘F’ rating getting more help," she said. "I’d have to argue it’s the latter. You have to be careful not to attribute success to vouchers when really it’s the additional help that all schools could get without a voucher program."

The challenge, then, the authors said, is how to ensure that the educational needs of students in unsuccessful schools are met, while at the same time preserving the benefits of self-governance and choice for others. "At a minimum, policymakers should be prepared to intervene earlier rather than later in order to prevent damage," they said.

"When Schools Compete: A Cautionary Tale" is available to order online from The Brookings Institution.