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What Are Education Markets, and Why Do They Matter?
By David W. Kirkpatrick (2/27/07)
Senior Education Fellow
U.S. Freedom Foundation   www.freedomfoundation.us

Broadly speaking, a free education market is a system in which parents decide what, where, by whom, and for how long their children will be taught. It is a system in which educators have complete control over the curricula they offer, the teaching methods t hey employ, the prices they charge, and the hours they work; in which anyone who wants to open a school has the right to do so; and in which the profit motive drives the innovation and expansion of some substantial share of the education sector.  It is also a system in which consumers are the primary payers and in which government schools do not enjoy a subsidy advantage over private schools–that is, if the government runs "free" schools, it must make a comparable level of financial assistance available to families who prefer independent schools.

Contrary to common assumptions, education markets are not a recent, untested idea. The first education system in the world in which schooling reached beyond a tiny ruling elite was the market that arose in classical Athens during the 5th century BC.  Today, education markets thrive everywhere from impoverished slums and villages of the developing world to the multi-billion-dollar after-school tutoring sector in Asia.  Conversely, though fee-charging, nongovernment schooling does exist to a limited extent in many Western nations, it would be a mistake to say that those schools currently constitute a free market in education, given that virtually all are nonprofit and must compete with a high-spending (and yet tuition-free) government monopoly.

Why does it matter whether or not education is organized along free-market lines? It matters because a substantial body of international and historical research finds that education markets are a superior way to meet the public's educational goals, in terms of both individual needs and broader social effects.  According to that research, market schools are typically more efficient, academically effective, well maintained, and responsive to the demand of families.  In addition, students in independent schools in the United States have been found to exhibit levels of civic engagement and tolerance that are comparable to or better than those of their peers in public-sector schools. Systems in which parents can easily pick schools of their choice, and in which most education funding comes directly from parents, also reduce the cultural conflicts that arise over government-run, government-funded schooling. The less people are pressured to patronize or pay for school they disapprove of, the less social tension is created. Finally, in the industries in which markets have been allowed to flourish, they have driven dramatic improvement in quality and efficiency, spurred relentless innovation, and pressured producers into being responsive to the preferences of consumers.

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The preceding is the Introduction (page 2) to The Cato Education Market Index by Andrew J. Coulson, with advisers James Gwartney, Neal McCluskey, John Merrifield, David Salisbury, and Richard Vedder, Policy Analysis No. 585, December 14,, 2006.  The full 23 -page publication is available from the Cato Institute, 1000 Massachusetts Ave.., N.W., Washington, D.C.., 20001, toll-free telephone,1-800-767-1241.  The Institute's website is www.cato.org


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Copyright 2007 David W. Kirkpatrick
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