Competition and choice in schools will boost results

Dec 1, 2015 by

Kevin Donnelly –

Competition, diversity and choice are needed if Australia wants to move forward – a lesson that can be partly learnt in the classroom.

The competition policy review, known as the Harper report, argues Australia needs to take urgent action to reinvigorate the nation’s competition landscape if we are to improve productivity and maintain our standard of living.

And education has a key role to play where we need to adopt a more market driven approach represented by competition, diversity and choice.

Even though NSW education minister Adrian Piccoli sides with the NSW Teachers Federation in arguing for the status quo, federal Education Minister Simon Birmingham also advocates a more innovative and flexible education system represented by school autonomy and vouchers to give parents more choice.


Education has a key role to play in Australia’s future. Photo: Erin Jonasson

The Harper report and Birmingham are correct.  Research suggests that education is a key driver to improve productivity and that a more market driven model is preferable to the old fashioned command and control model where governments, bureaucracies and teacher unions control what happens in schools.

A recent OECD report titled Universal Basic Skills argues that if more students in high-income countries like Australia reached level 1 performance then GDP, on average, would rise  3.5 per cent over the next 15 years.

Level 1 is where “every student demonstrates elementary skills to read and understand simple texts and master basic mathematical and scientific concepts and procedures”.  Too many Australian students fail to reach level 1 and we are ranked 27th in the international literacy test PIRLS.

Two overseas researchers, Eric Hanushek and Ludger Woessmann, in the The Knowledge Capital of Nations also see education as one of the key drivers, explaining why some economies enjoy long term growth while others  go backwards.

Using the example of many East Asian countries and the fact that many once successful South American countries pale by comparison, the two researchers point to the key role of education promoting “knowledge capital”.

Hanushek and Woessmann argue that knowledge capital is “the crucial missing link in explaining why Latin America went from reasonably rich (to) relatively poor”.

Compared with countries like Brazil, Singapore with limited natural resources or significant industrial or agricultural industries has achieved increased productivity and wealth as a result of improving knowledge capital as measured by international mathematics and science tests.

As noted by the OECD’s Strong Performers and Successful Reformers in Education: Lessons from PISA for the US, what makes Singapore’s success even more admirable is that at independence in 1965, most of its citizens where illiterate.

What needs to be done to strengthen Australia’s knowledge capital and improve productivity?  The first thing to realise is that the Rudd/Gillard inspired Gonski funding review got it wrong as increased investment, by itself, achieves little and takes resources away from more effective policy initiatives.

Australian researchers Andrew Leigh and Chris Ryan, in their paper titled Long-Run Trends in School Productivity: Evidence From Australia conclude that despite a significant increase in per-child expenditure,  standards have declined and as a result “productivity has fallen over the past four decades”.

Stronger performing education systems have rigorous, academically focused curriculums that are concise, easily understood and free of jargon.

Such curriculums deal explicitly with the essential knowledge, understanding and skills associated with the academic disciplines and, compared with Australia, there is a greater reliance on competitive assessment and teacher directed classroom practice.

In stronger performing systems teachers are respected, well resourced and paid, treated as professionals and teacher unions like the NSW Teachers Federation play a minimal role.

Proven by the success of Australia’s Catholic and independent schools, that have a greater degree of autonomy compared with government schools, it is also necessary to adopt a more market driven approach to education.

Research related to charter schools in the US and free schools in England concludes that autonomy leads to greater innovation and better decision-making as well as a more efficient use of resources.

Diversity and choice are also beneficial as schools seek to meet the demands of their communities.  As argued by the American economist Milton Friedman, introducing a more market driven model leads to greater productivity and stronger outcomes.

Introducing vouchers, where the money follows the child and parents can choose between a government, Catholic or independent school, also leads to schools being more efficient and disadvantaged students, in particular, benefiting in terms of stronger educational outcomes.

Stronger performing education systems also impose accountability on schools best illustrated by externally set and marked competitive, academically based Year 12 examinations.

Given such examinations are set and marked externally, as opposed to school-based assessment, and results are made public, under-performing schools are identified and there is pressure on all schools to improve results.

Piccoli and his friends at the Teachers Federation are stuck in a command and control, obsolete model of education that denies parental choice, higher standards and increased productivity.

Dr Kevin Donnelly is a Senior Research Fellow at the Australian Catholic University and Director of Education Standards Institute.

Source: Competition and choice in schools will boost results

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