U.S. Has Not Yet Seen True Market-Based Reform in Education

Most school choice programs do not provide enough adequate data for proper analysis

April 16, 2008

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WASHINGTON—Most U.S. school choice studies to date have made mistaken and insupportable claims about market reform in education, finds a Policy Analysis released by the Cato Institute today.

“The most intensely studied [school choice] programs lack most or all of the key elements of the market system, including profit, price change, market entry, and product differentiation — factors that are normally central to any discussion of market effects. In essence, researchers have drawn conclusions about apples by studying lemons,” writes John Merrifield, professor of economics at the University of Texas-San Antonio, editor of the Journal of School Choice, and author of Parental Choices as an Education Reform Catalyst: Global Lessons and The School Choice Wars.

The release of “Dismal Science: The Shortcomings of School Choice Research and How to Address Them,” comes just weeks before the 25th anniversary of the famous “Nation at Risk” report, which concluded that the country’s educational performance was weak and declining. “Dismal Science” sheds light on the debate among education reformers about the promise of market reforms versus government standards as a way of improving U.S. academic performance.

According to the study, existing American school choice programs not only lack many or all of the key elements of markets, but are also capped at inadequately small enrollment levels to generate substantial market forces. Merrifield points out that even the existing U.S. private school sector does not constitute a free market system given the impediment of competing with public schools that deliver schooling for “free.”

The idea that market-based education reform has been tested by existing school choice programs is not only incorrect but dangerous. It would be tragic indeed if the vast improvements that market accountability could bring to the education system were never given a chance because of the evidence presented by programs that do not comply with free market standards.

Proper studies utilizing economic simulation models or existing data from international, historical, and higher education markets are essential if the merits of k-12 market education are to be accurately assessed. “The biggest challenge is to get policymakers to take that evidence seriously,” Merrifield concludes.