Theory versus Empirics: A Review of the International School Choice Literature

Already four in five OECD countries allow government-dependent private schools and independent private schools to provide compulsory education and that opportunities for school choice have generally expanded over the last 25 years. For an up-to-date overview of the school choice literature, this review first sets out the main theoretical considerations, using the evaluative framework outlined in Levin (2002) and then evaluates the growing empirical literature on school choice. Different effects of school choice expansion have been hypothesised, and empirically corroborated, within each of the following dimensions: freedom of choice, productive efficiency, equity and social cohesion. The results depend strongly on how a programme is designed in terms of finance, regulation and support services. Whereas freedom of choice is generally improved by expanding choice, empirical results point out that the range of choices might only marginally increase for households facing financial, residential, transportation, eligibility and/or information constraints. Regarding productive efficiency gains, results are modestly positive for the potential of competition to increase overall average achievement. The most promising results for choice are found when the alternative is a low-performing neighbourhood school. A well-designed targeted choice plan can improve educational equity, but large-scale choice systems, particularly those that allow for funding disparities, are generally found to exacerbate existing inequities. Empirical research on social cohesion is still scarce, yet by shifting the power over the school from policymakers to households, there are reasons to believe that school choice expansion can come at the expense of social objectives of education.