Public and Private Schools

How Management and Funding Relate to their Socio-economic Profile

image of Public and Private Schools

In most PISA-participating countries and economies, the average socio-economic background of students who attend privately managed schools is more advantaged than that of those who attend public schools. Yet in some countries, there is little difference in the socio-economic profiles between public and private schools. Why? An analysis of PISA results finds that while the prevalence of privately managed schools in a country is not related to socio-economic stratification within a school system, the level of public funding to privately managed schools is: the higher the proportion of public funding allocated to privately managed schools, the smaller the socio-economic divide between publicly and privately managed schools. This report also shows that those countries with narrow socio-economic stratification in their education systems not only maximise equity and social cohesion, but also perform well in the PISA survey.


A brief history of public and private involvement in schools in Chile

In the 1980s, Chile reformed its education system by introducing profound changes in how schools are administered and funded. The aim of the reforms was to decentralise school management and introduce school choice (Beyer, 2000). The administration of state schools was devolved to municipalities, and special regulations for teachers’ contracts were abolished.1 Chile adopted demand-side subsidies to finance municipal schools and government-funded private schools.2 This reform was guided by various principles: school choice improves the welfare of families who send their children to school; the social costs of implementing demand-side subsidies are minimal; privately managed education is inherently more efficient and cost-effective; municipal schools will also become more effective by competing for students; and a competitive education system is more likely to improve social mobility for children from low-income families (Carnoy, 1998; Hsieh and Urquiola, 2006; Cox, 2003; Beyer, 2008).


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