The Market in Education has Failed in Sweden

Sweden is the latest model for those advocating markets in education as the way to improve school results. It provides the model for so-called “free schools” being introduced in England by the UK Coalition Government.

Professor Henry Levin, distinguished economist and director of the National Center for the Study of Privatization in Education at Teachers College, Columbia University in New York, recently gave a presentation to a conference convened by the Royal Swedish Academy of Sciences to review the evidence about the effects of vouchers in education, which were introduced in Sweden in 1992.

Professor Levin has provided the following summary of his presentation. It was originally published on Diane Ravitch’s blog. Professor Levin’s powerpoint presentation can be downloaded from the blog.

In 1992 Sweden adopted a voucher-type plan in which municipalities would provide the same funding per pupil to either public schools or independent (private) schools. There were few restrictions for independent schools, and religious or for-profit schools were eligible to participate. In 1994, choice was also extended to that of public schools where parents could choose either a public or private school. In the early years, only about 2 percent of students chose independent schools. However, since the opening of this century, independent school enrollments have expanded considerably. By 2011-12 almost a quarter of elementary and secondary students were in independent schools. Half of all students in the upper secondary schools in Stockholm were attending private schools at public expense.

On December 3, 2012, Forbes Magazine recommended for the U.S. that: “…we can learn something about when choice works by looking at Sweden’s move to vouchers.” On March 11 and 12, 2013, the Royal Swedish Academy of Sciences did just that by convening a two day conference to learn what vouchers had accomplished in the last two decades. Interest in the subject had been piqued by several developments including the dramatic growth in private school enrollments and a fairly precipitous decline in Swedish performance on international tests. Results in reading, science, and mathematics had fallen at all grade levels from 1995 to the present in the international studies.

In addition there was evidence of increased stratification and segregation of students by socio-economic status and ethnicity over the same period. Finally, there were concerns about the reportedly substantial profits being amassed by the independent schools from public funds.

The conference comprised a Swedish audience with both Swedish presenters supplemented by a few international experts (Austria, Finland, UK, and U.S.). I was assigned to provide an overview on “Evaluating Consequences of Educational Evaluation. In the remainder of this note I describe the overall framework that I used and my conclusions.

As in all of the analyses on school choice and vouchers of our National Center for the Study of Privatization, I presented the four criteria that we use for evaluation of particular schemes: freedom of choice, productive efficiency, equity, and social cohesion. I also discussed how design of the plans draws upon three policy instruments: finance, regulation, and support services. The details of design are crucial for shaping the outcomes of choice and voucher plans.

In using these criteria for evaluation, I employed the research evidence that had emerged on the Swedish voucher system. This compendium of research comprised a number of highly sophisticated studies on the impact of the system on student achievement and student stratification. The following was my verdict:

• On the criterion of Freedom of Choice, the approach has been highly successful. Parents and students have many more choices among both public schools and independent schools than they had prior to the voucher system.

• On the criterion of productive efficiency, the research studies show virtually no difference in achievement between public and independent schools for comparable students. Measures of the extent of competition in local areas also show a trivial relation to achievement.

The best study measures the potential choices, public and private, within a particular geographical area. For a 10 percent increase in choices, the achievement difference is about one-half of a percentile. Even this result must be understood within the constraint that the achievement measure is not based upon standardized tests, but upon teacher grades. The so-called national examination result that is also used in some studies is actually administered and graded by the teacher with examination copies available to the school principal and teachers well in advance of the “testing”.

Another study found no difference in these achievement measures between public and private schools, but an overall achievement effect for the system of a few percentiles. Even this author agreed that the result was trivial.

In evaluating these results, we must also keep in mind that the overall performance of the system on externally administered and evaluated tests used for international comparisons showed substantial declines over the last fifteen years for Sweden.

We also heard from Swedish researchers that the independent schools were putting considerable resources into marketing, including using teachers to serve the marketing function. My conclusion was that there is little evidence of improved productive efficiency from the initiation of the Swedish voucher system.

• With respect to equity, a comprehensive, national study sponsored by the government found that socio-economic stratification had increased as well as ethnic and immigrant segregation. This also affected the distribution of personnel where the better qualified educators were drawn to schools with students of higher socio-economic status and native students. The international testing also showed rising variance or inequality in test scores among schools. No evidence existed to challenge the rising inequality. Accordingly, I rated the Swedish voucher system as negative on equity.

• Finally, there was no direct assessment of the effect of the system on social cohesion. This criterion refers to the quest of schools to prepare students for successful participation in social, economic, and political institutions requiring a common set of skills and capabilities for mutual interaction, communication, and democratic behavior. No evidence was available. Although I did not provide a conclusive judgment for this criterion, one might surmise that the increasing stratification represents an obstacle to social cohesion.

This evaluation was well-received, in part, because it was presented matter-of-factly and with clear reference to the evidence. There was no disagreement over the existing evidence by the assemblage.

Among the industrialized countries, only three have a universal voucher or choice system Chile, Holland, and Sweden. Some would also argue that Belgium qualifies in this category.

The former three countries have very different designs with the Dutch system being the most highly regulated and devoting the most attention to equity. Even so, the tracking that takes place at age 12 in the Netherlands between vocational and academic secondary schools has important equity consequences in terms of socio-economic stratification. Although based upon choice, the available choices available to a student are heavily dependent on her achievement test results.

The Chilean system has witnessed an increasingly notable stratification of the population, both within and between public and private sectors. Students from more educated and wealthier families are found in the private schools which receive public funding, but can choose which students to accept from among applicants. The Chilean system allows schools to charge additional fees beyond the voucher, also favoring more advantage families.

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