New at AdamSmith.org: Does the profit motive hurt school quality?

Opponents of the idea that schools should be owned and operated by businesses for profit often claim that such can only come at the expense of quality. Until relatively recently, advocates of the model have had to base their argument on case study evidence, mainly of the performance of proprietorially owned chains. However, system-wide studies are now beginning to emerge and it is worth bringing these to wider attention.

In the US, the most noteworthy study of the for-profit effect has been undertaken by Hill and Welsh, who used school-level data to compare for-profit and non-profit charter schools in Michigan. A four year panel of data was constructed (2001-02 to 2004-05) , with all Michigan charter schools which had students taking either the required 4th and/or the 8th grade state level math exam, referred to as MEAP scores (Michigan Educational Assessment program), included in the analysis. A random effects model was employed, controlling for student and district characteristics. The results were published as ‘For-profit versus not-for-profit charter schools: an examination of Michigan test scores’ (Education Economics, 2008), with the authors concluding that they could find no evidence to suggest that the type of ownership of a charter school (profit or not‐for‐profit) affects the delivery of education services either way.

Read this article.