A thought experiment about charter schools and competition

Charter schools are, obviously, in the news. The latest development is an open letter sent to all MPs arguing against them, and saying, among other things, that they haven't worked overseas.

In future posts I'll come back to the points raised in the letter, and talk about some empirical, real world evidence. But let's just suppose for a moment you knew nothing at all about the practical outcomes of charter schools overseas. Let's go back to first principles for a minute.

Who would you expect to benefit from greater choice in education? Or indeed from greater choice across a wide variety of public services - charter schools are only one example of a strong and growing trend in the developed world towards offering greater choice in areas such as education and health. Self-evidently, you'd expect the people who would benefit most are those who have least choice now.

And who would they be, I wonder?

It's not the well-off: they can, and do, pay for private schooling and private health.

It's not the moderately well-off: they can, and do, change the health or education zones they live in. They aim to buy a house in a good school zone: you'll have seen for yourself that the estate agents signs regularly advertise 'In zone' for a well-regarded local school. And there's nothing unusual in that, by the way - it's internationally well-documented that one of the main effects of zoning-style school allocation is that house prices rise in the better locations.

The main beneficiaries of choice, in short, can only be those who currently have little or no choice at all. And in New Zealand conditions (and in many other countries), that means poorer people in poorer areas.

And it's not like you can escape the poor areas without money. Bright kids in poor areas can't, in general, get scholarships to good private schools elsewhere: that was one of the first things the incoming Labour government of 1999, unforgivably, banged on the head. So poor kids, bright or less bright, are trapped. The only choice they have, at the moment, is the school they're in zone for. It might be an awful sinkhole school, but that's all that is on the menu.

So: a charter school arrives. And your current  local school is dire.

Take a wild punt on the outcome: your current dire school, plus the chance (not the certainty) of a better school, versus your current option, the dire school.

How likely is it that you will be worse off?