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Fear of school profit holding quality back
IPA REVIEW ARTICLE
In Australia, schools are operated either by the government or by not-for-profit private organisations. It is prohibited to run a school to make a financial profit.
In the United States there is no such prohibition. And a recent study published by the Kennedy School of Government at Harvard University, Impact of For-Profit and Non-Profit Management on Student Achievement: The Philadelphia Experiment, confirms exactly what would be expected. For-profit schools produce better educational outcomes for their students than government-owned and operated schools and not-for-profit schools.
In 2002 the School District of Philadelphia restructured the management of its 83 lowest-performing schools. Of these schools 16 were simply given more resources, 21 were run by a special division of the education department, 16 were contracted out to not-for-profit organisations, and 30 were contracted out to for-profit companies.
The test scores of 400,000 students were tracked between 2001 and 2006. The result was that after four years students in schools managed by for-profit companies were approximately six months ahead in mathematics than if they had remained in a government-run school.
In reading, while again students in for-profit schools did better than students in the other schools, the difference was not statistically significant. Interestingly, there were no significant differences in the performances of students in government-run schools compared to those in school operated by not-for-profit organisations.
Not surprisingly, these results have proved controversial. Opponents of for-profit education have traditionally argued that private for-profit companies would ‘cut corners' to save costs and would provide an inferior education to what was offered by the government. Of course there are few, if any, activities in which the government outperforms the private sector-and education is no exception.
For-profit schools have a financial incentive to ensure that their students achieve high outcomes. This study demonstrates that the ban on for-profit schools in Australia is driven by nothing more than ideology.