Competition Within Schools: A Case for Re-targeting
Educational Policy?
Nick Adnett* and Peter Davies,
Institute for Education Policy Research, Staffordshire University
Abstract
The introduction of market-based reforms of state schooling systems have been
justified by the supposed benefits of encouraging greater inter-school competition in
local schooling markets. Promoting increased competition by comparison was seen as
a means of stimulating greater allocative, technical and dynamic efficiency in schools.
However, school effectiveness research suggests that once adjustment is made for
pupil characteristics, variations in pupil attainment levels between secondary schools
are small and unstable over time. Some limited evidence suggests that differences in
pupil attainment by subject within schools are larger, indicating the potential to raise
attainment levels by increasing choice within schools. However, recent reforms in
many countries, such as those strengthening the compulsory curriculum or publicising
school-wide measures of school attainment, have sometimes effectively reduced intraschool competition. In this paper we examine the case for increasing intra-school
competition, identifying both desirable and undesirable consequences of increasing
competition within secondary schools.
EERA Network:
Network 8. Economics of Education
PRELIMINARY DRAFT
*
Corresponding Author: Institute for Education Policy Research, Staffordshire
University, Leek Road, Stoke-on-Trent, ST4 2DF, UK.
Tel.: +44 1782 294078, fax: +44 1782 747006, e-mail: [email protected]
1
Competition Within Schools: A Case for Re-targeting
Educational Policy?
1. Introduction
In this paper we contribute to the analysis of market-based reforms of state schooling
systems by re-evaluating the conventional analysis of competition in schooling
markets. Specifically, we distinguish between inter-school and intra-school
competition and investigate whether the general neglect of the latter in recent
European educational policies is warranted.
Education policies in many OECD countries have been strongly influenced by the
market choice critique of state schooling. This has prompted a range of policy
initiatives, from open enrolment to increased performance monitoring, stimulating
inter-school competition with the objective of raising pupil attainment. However,
school effectiveness research, surveyed below, indicates that within school variations
account for a higher proportion of the overall variability of pupil attainment levels
than that due to between school variations. Moreover, the variations between schools
do not appear to be stable over time. Together these findings raise the question as to
whether there is a need to re-focus on behaviour within schools and to assess the
extent to which targeted policy initiatives to increase competition within schools
could assist the raising of pupil attainments. Such a re-orientation may be particularly
important since some popular policies, such as a strengthening of the compulsory core
curriculum and publication of whole-school measures of performance, can effectively
reduce intra-school competition.
Greater intra-school competition can raise educational attainment levels if greater
within-school choice enables parents and pupils to improve the match between the
curriculum and their particular aspirations and abilities. Attainment levels will be
further boosted if subject groups of teachers within schools compete for market share
by seeking to raise their relative effectiveness. This is especially likely where pupil
choice of subjects is sensitive to previous cohorts’ performance in national
examinations. However, increasing intra-school competition may also encourage
2
opportunistic behaviour amongst teachers and heads. The dysfunctional effects
generated by school performance tables (West and Pennell, 2000) and performancerelated pay (Adnett, 2002) are likely to be strengthened as teachers compete to
improve their relative measured performance within a school. In particular, teachers
may further indulge in syllabus switching, seeking ‘easier’ examination boards, or
concentrate upon borderline pupils in order to improve their students’ results without
any increase in their effectiveness. Similarly, cream-skimming may be strengthened
within schools as teachers seek to raise their classes’ results by favourable redistributions of peer-group effects. Finally, reduced co-operation and a weakening of
‘collegiate ethos’ may harm non-academic schooling outcomes and reduce resistance
to further intensification of working loads, making a ‘rat race’ equilibrium more
likely.
In this paper we seek to develop an economic analysis of these processes within
schools, creating a framework for later empirical analysis. Our arguments are
organised as follows. In Section 2 we summarise the consequences of reforms seeking
to increase inter-school competition. We concentrate on the case of England, since
here a broadly consistent market-based policy stance has been followed over the last
twenty years (West and Pennell, 2002). In the following section we briefly review the
empirical evidence concerning the determinants of student progress in the English
secondary schooling system, the sector where quasi-market reforms have had their
biggest effect. We concentrate upon the identification of school effects and whether
the residual estimates of school effectiveness indicate these effects are stable over
time. Section 4 presents arguments favouring increased intra-school competition and
mechanisms that could deliver beneficial outcomes. In Section 5 we consider counterarguments, identifying potential dysfunctional effects resulting from increased
competition within schools. The final section contains our conclusions concerning the
optimal degree of choice within schools.
2. The Consequences of Increased Inter-School Competition
Market-based reforms of state secondary schooling have occurred in many Western
countries over the last twenty-five years. Although voucher experiments have been
3
relatively rare, inter-school competition has been encouraged by a variety of measures
based upon increasing parental choice. Schools have been enabled to respond to the
increasing voice of consumers by the devolution of greater financial decision-making
to individual schools through local management of schools reforms (Adnett and
Davies, 2002). In England, market-based reforms were initiated by Conservative
governments in the 1980s, and the Labour Government has largely continued with the
market-orientated philosophy (Glennerster, 2002, West and Pennell, 2002). To
generate greater competition by comparison, the government has taken responsibility
to ensure that tables of school performance are published annually, enabling
consumers to take more informed decisions. It seems clear that these reforms have in
total increased the degree of competition between schools in local secondary
schooling markets (Adnett and Davies, forthcoming). What is more disputed is their
impact upon behaviour and outcomes in schooling markets.
If we view the government as the sole principal in the schooling system we may
conclude that schools, as agents, are now fulfilling more completely the principal’s
objectives. For example, the proportion of 16 year-olds in England achieving 5 grades
A*- C in public examinations has risen substantially, from 35.5 % in 1992 to 57.9% in
2002. Some support for attributing part of this increase to competition between
schools is provided by Bradley and colleagues (Bradley and Taylor, 2000, Bradley et
al., 2000). They find that a 1% increase in the examination results of other local
schools led to 0.3% increase in a school’s own examination performance, with the
impact being nearly twice as great in metropolitan areas than in non-metropolitan
areas. They also find that the impact of examination results of other local schools on
academic attainment at a given school increased over their period of study (1992-
4
1996). However, there are difficulties in interpreting the improvement in public
examination performance as indicating the success of more competitive markets in
responding more effectively to parental and government preferences (Gorard and
Taylor, 2002a). In particular, improvements in attainment levels have been slowest in
the secondary sector where the market-based reforms have had their biggest impact
(Glennerster, 2002). We mention two further issues here.
First, schools are multi-product institutions with heterogeneous inputs, and
dysfunctional responses to the introduction of performance monitoring are likely to be
common. Dependent upon the extent to which the differing schooling outputs are in
competitive supply, the resulting ‘improved’ performance will be to the detriment of
unmeasured outputs. For example, West and Pennell (2000) review evidence
suggesting a link between the publication of league tables and the trebling of
permanent exclusions in the early 1990s. Schools may also be getting more efficient
in the production of examination results rather than in raising pupils’ overall academic
performance.
Second, an overall increase in attainment may be accompanied by a decrease in
equity. Cream-skimming and/or the increased exercise of parental preferences
reallocate positive peer group effects away from lower-ranked schools. Effectively,
open enrolment systems privatise ownership of the beneficial externalities produced
by able pupils, with both parents and schools seeking to obtain the most favourable
mix of peer group effects. The net impact of open enrolment on overall stratification
of pupils by social class and ability in England is currently much debated. Gorard and
Fitz’s (2000a, 2000b) finding that at national, regional and local government level
5
segregation has been reduced being challenged by Bradley and Taylor (2000) and
Goldstein and Noden (2002) as well as those by researchers using in-depth studies of
parental choice (e.g. Gewirtz et al., 1995). The Chief Inspector of Schools in England
has noted a widening gap between the performance of pupils in the highest and lowest
ranking schools (OfSTED, 1999), though Glennerster (2002) shows that at Key
Stages 1 and 3 there has recently been generally greater improvement amongst the
lowest-performing schools. However, between 1993 and 1997 whilst the average
GCSE point score increased from 33.1 to 35.9, the top 10% of the cohort of pupils
(by examination performance) experienced an increase of 4.4 and the bottom 10% of
the cohort declined from 0.8 to 0.7 (West and Pennell, 2000).
Apart from the overall impact on levels of academic attainment, we also need to
address the impact of reforms on the incentives and ability of individual schools to
innovate and disseminate best practice. Given that the allocation of peer effects is a
‘zero-sum’ game, schools which engage (or are perceived to engage) in creamskimming are likely to rule themselves out of collaboration in the local market. Adnett
and Davies (forthcoming) argue that this has lead to reductions in the speed of
dissemination of best practice. In terms of innovation then, for schools at the top of
the local hierarchy there are no market incentives to undertake this costly and risky
process. However, for those lower down and losing market share, the market provides
incentives for curriculum innovation but takes away the necessary resources (Adnett
and Davies, 2000, Davies et al, 2002 and Woods and Levačić, 2002). If enrolments
fall then budgetary constraints are tightened, while average teaching costs per pupil
rise given the presence of economies of scale in the size of schools currently found in
the UK (Taylor and Bradley, 2000). Schools in this predicament lack the resources
6
necessary to fund curricula innovations and promote themselves in the local market
place.
Using multiple regression analysis, Levačić and Woods (2002) investigate the
determinants of differences in the rate at which secondary schools improved their
GCSE performance during the 1990s. They confirm that the market-reforms have
resulted in high performing schools increasing their budget shares over time. Whilst
schools with the lowest performance in the base year made the greatest improvement,
schools low down in the local hierarchies, and therefore with a high concentration of
socially disadvantaged students, had particular problems in improving their academic
results. More specifically, LEA schools with a higher concentration of socially
disadvantaged students were likely to suffer a dual handicap of being low down in the
local school hierarchy and an increasing share of socially disadvantaged pupils. Given
the processes at work in contemporary quasi-markets, a school can face this outcome
regardless of their absolute or relative success in promoting educational value-added.
Indeed, for any school even ‘doing the right thing’ may not be sufficient for it to
maintain market share against less effective schools who have an intake of higher
average ability.
In summary, greater competition in English secondary schooling markets seems to
have promoted higher levels of academic attainment, but school choice reforms have
a tendency to reinforce local schooling hierarchies, reduce the diversity of provision
and increase differences in the mean pupils’ academic attainment between schools.
Though as Gorard et al. (2002) show the spirals of decline anticipated by the critics of
school choice have been rarely observed in practice. Crucially however, as
7
Glennerster (2002) has pointed out, these reforms have in total failed to make schools
indifferent between accepting pupils with above or below average potential or
between those with below or above average problems.
Collectively these weaknesses have encouraged more recent policy initiatives in
England, which effectively limit inter-school competition. The Specialist Schools
Programme provides financial incentives for schools to become specialist providers of
a particular curriculum (ranging from Technology to Arts and Sports) in their local
market and 34 per cent of pupils in maintained secondary schools were in such
schools in September 2002. Whilst the government has claimed that specialist schools
have achieved higher levels of attainment (Jesson and Taylor, 2002) it is not clear
whether any superior performance reflects cream-skimming, greater resources or
more effective schooling (Gorard and Taylor, 2002b, Schagen and Goldstein, 2002).
In addition, through its Beacon Schools and Education Action Zones initiatives the
government has added financial inducements for increased school co-operation
through sharing expertise and jointly developing new teaching materials and learning
support mechanisms. Together these initiatives represent a significant departure from
the previous policy of increasing inter-school competition within the constraints of a
tightly controlled National Curriculum and broadly common funding formula. The
rest of our paper considers whether increasing intra-school competition represents a
feasible alternative strategy for the reform of ‘bog-standard’ secondary schooling. Our
first step is to reconsider the empirical evidence concerning the contribution of
between school and within school factors on student progression in English secondary
schools.
8
3. Size and Stability of School Effects on Student Progression
The case for relying on competition between schools to raise pupil attainment is
weakened by evidence that whole school effects account for a very small and rarely
sustained proportion of variance in pupil attainment. Multi-level modelling techniques
have been used in several studies to try to isolate the contribution of schools to
student attainment.. For example, O’Donoghue et al. (1997) examine the contribution
of schools to the improvement in students’ performance between GCSE and A Level
examinations. They found that some 90 per cent of the variation in student
performance is between individuals within an institution, with 8 percent attributable to
the specific establishment attended. Goldstein and Thomas (1996) estimated the latter
at just 4 per cent. However, we may expect that as competition increases school
effects will fall, as pressures mount on less successful schools to improve and
imitation of high achievers increases.
Yang and Woodhouse (2001) find that after allowing for prior performance at GCSE,
gender, age, establishment type and region, individual establishments accounted for
less than 5 per cent of residual variance. They also found that establishments were
differentially effective according to gender and the prior attainment of the student and
that the stability of these establishment effects over time is not high. The stability of
school effects has also been addressed by Gray et al. (2001) and Thomas (2001) who
broadly confirm previous findings. For example, working on the same dataset as Yang
and Woodhouse, Gray et al. find that the stability of an institution’s students’ overall
performance over time is deceptive, in that it largely reflects the stability of the profile
of an institutions’ intake over time. They conclude that few schools show any clear
time trend in effectiveness and those that can be observed tend to be short-lived.
9
Hence, trends over three years were only mildly predictive of an institution’s
effectiveness in the fourth year. Indeed in those small number of institutions (the top
and bottom 5%) where the trends were most evident, the most frequent outcome in the
fourth year was in the opposite direction to the trend.
A different perspective is provided by Tymms (1992), who suggests that the
proportion of variance in pupil attainment attributable to schools is higher when
performance in analysed on a subject by subject basis. He concluded that school
performance is determined most strongly by the individual pupil, then by the
department responsible for a particular performance, then by the school as a whole
and finally by the type of school. Together these findings suggest that there may be
more scope for competitive processes to impact on pupil attainment within schools
than between schools, a point not previously addressed in the literature on
competition and schooling.
4. The Benefits of Increasing Intra-school Competition
It is inter-personal differences in tastes and talents, whether innate or environmentally
produced, which stimulate competitive markets to efficiently intermediate and exhaust
the gains from trade (Rosen, 2002). In a truly market-based system we would expect
that the variety of tastes, talents, attitude to risk and uncertainty together with
information asymmetries would lead to a diverse provision of curriculum in local
schools. Schools and teachers in order to prosper in the market would have to match
the preferences of local parents and students. The principle of comparative advantage
formalises the benefits from the resulting specialisation of investments in human
10
capital. It is therefore somewhat ironic, as observed by Ball (1990), that the marketbased reforms in England were accompanied by a significant increase in the
compulsory element of secondary schooling.
Competitive processes may be likely to exert stronger effects (positive or negative)
via students’ specialisation when this takes place within a school rather than between
schools. There is ample evidence from other markets than when consumers are faced
with complex decisions they rely upon simple signals and employ heuristics which
generate systematic deviations from that behavior implied by conventional economic
analysis (Conlisk, 1996). As Levin (1991) argued, schools are too complex to portray
their overall quality and particular specialities effectively to parents and pupils. Most
parents make infrequent, but closely spaced, schooling decisions and the
consequences of those decisions are only revealed, if at all, in the long term.
Moreover, education is an 'experience good' in that the costs of identifying the quality
of provision are higher before admission than after pupils and parents have spent time
at the school. There are also significant switching costs should pupils and parents
wish to change schools. In such markets Klemperer (1987) has shown that consumers
are reluctant to exercise their 'exit' threat and consumer preferences may be less
effective at influencing school curriculum.
We have already seen that in England greater inter-school competition does not
always seem to have created incentives for an increase in the diversity of provision in
local schooling markets. In part, this also reflects that with younger students,
uncertainties over student capabilities and changes in within-school effectiveness
consequent on changes in the allocation of teachers, provide incentives for parents
11
and students to defer specialisation beyond initial secondary school choice decisions
(Brown, 1992, Adnett and Davies, 2000). Taken together these arguments suggest that
student initiated specialisation appears more likely to provide incentives for school
effectiveness if they have opportunities to make these choices within their school.
Increasing choice within schools may also avoid some of the undesirable stratification
effects induced by greater inter-school competition recorded above.
The publicising of school-wide unadjusted performance tables is likely to generate
free-riding amongst teachers and heads in both highly-ranked and lowly-ranked
institutions, especially when combined with a large compulsory core curriculum. In
this situation, in the absence of performance-related pay and given their individual
inability to influence the characteristics of their schools’ intake, teachers (unlike
schools) face insufficient incentives to unilaterally target improving their students’
performance. Whether greater within school choice would lessen this agency problem
depends in part on the extent to which students’ choice responds to relative teacher
effectiveness.
Pupils may gain from greater subject choice through an improved matching of
curriculum to their aspirations and abilities (e.g. Stables, 1997). Research in the 1980s
reported by Kelly (1988) and Stables (1996) found that 14 year old pupils claimed
that their expectations of who was teaching a subject had little impact on their choice.
Teachers may, however, have affected subject choice through an effect on pupils’
prior attainment and expectations of interest in the subject. A stronger, more direct
reference to pupils’ expectations is found in a recent survey conducted by Adey and
Biddulph (2001). Roughly 10% of 14 year-olds choosing Geography or History
12
claimed that previous GCSE examination results in the school had influenced their
choice. Evidence of ex post subject choice in the form of the number of students
studying each subject in each school may be interpreted as suggesting a stronger
relationship between subject teacher performance and subject choice. Data on choice
at 14+ by (Ryrie et al., 1979) and choice at 16+ (Fitz-Gibbon, 1999) indicates
substantial variations between schools in the proportion of students studying different
subjects. Ryrie et al.’s data show that these variations are much greater than year-onyear variations within a school and they exist between pairs of subjects (such as
History and Geography or Physics and Chemistry) that are not easily interpreted as
the result of pupil background. This evidence may reflect an institutional effect on ex
post choices. The strength of between subject variations found by Fitz-Gibbon also
suggests a much higher profile of expected teacher effectiveness in students’
decisions when aged 16. In addition, evidence provided by Thomas et al., (1997)
indicates that value added by different departments varies according to pupil type, but
we do not know whether pupils (or schools) take this and/or anticipated peer group
effects into account in their choices. Currently, research does not tell us whether the
likelihood of a student taking teacher effectiveness into account varies significantly
according to student ability and background or according to the establishment
attended.
In addition to the improved matching of curriculum with student’s ability and
aspirations, economic theory suggests that increased intra-school choice should
improve the sensitivity of human capital investment to labour market needs.
Incentives in the form of differing lifetime expected labour market income should
influence curriculum choice, favouring subjects relevant to occupations with a relative
13
shortage of entrants or combinations of subjects that together raise productivity in
employment. However, Levine and Zimermann (1995) for the US and Dolton and
Vignoles (2002) for the UK found that mathematics is the only secondary school
subject to have a significant positive effect upon earnings. Whilst the length of
schooling appears to determine future earnings, the specific curriculum studied does
not appear to influence these labour market returns. Johnes (2001) examines the
combination of subjects studied and finds that other subjects in addition to
mathematics have a positive impact upon earnings. What appears to matter is not so
much the depth or breadth of curriculum but the particular combination of subjects
studied.
The replacement of a compulsory curriculum by school-directed subject choice might
also improve pupil attainment if schools’ interests are closely aligned with pupil
achievement. Senior managers in schools are likely to be better informed than pupils
about the relative effectiveness of different teachers and pupils may benefit from
policies which discourage students from choosing from subjects taught by less
effective teachers and departments. However, the existence of losses to students
arising from schools’ being misinformed about pupils’ potential has been confirmed
by research into the effects of curriculum pathways within schools (Woods, 1979;
Ball, 1981). We might also anticipate losses through schools’ exploiting their power
to guide pupils into subject choices that create more easily manageable class sizes
reflecting the distribution of skills of the current staff and difficulties of recruiting
certain specialists. The relative force of these arguments will depend on whether
schools or pupils take the lead in determining pupils’ subject choices. Research on
pupils’ ex ante preferences suggests these are partially formed through personal
14
aspiration and partially formed through institutional influence. For example, Kelly
(1988) finds that gender differences in subject choice at age 14 largely reflect
observable background factors including advice received, whilst Colley et al. (1994)
find an institutional influence on the pattern of subject choice reflected in differences
between single sex and co-educational schools. Whilst some researchers (e.g. Smith
and Tomlinson, 1989) have concluded that institutional interests are dominant in
subject choice, others (e.g. Stables, 1997) have concluded that students’ preferences
play a significant role. Evidence of the effect of the opportunity for subject choice on
the level and distribution of pupil attainment is important regardless of whether that
choice primarily reflects the interests of the pupil or the school. Yet, despite the longstanding nature of within-school competition between subjects, systematic evidence
on its impact on the level and distribution of outcomes for pupils is missing. This
impairs the ability of policy makers at government and school level to make informed
decisions about the wisdom of extending or reducing subject choice for pupils aged
14-19.
We have seen that there are a number of ways in which increasing intra-school
competition may improve the effectiveness of secondary schooling. First, by
improving the match between curriculum, teacher effectiveness and students’
abilities, aspirations and preferences. A better match may generate further benefits if
it results in increased student motivation and effort. Second, increased choice has the
potential to reduce free-riding amongst teachers and heads. Finally, it enables students
to respond to labour market signals.
15
5. The Constraints on Increasing Intra-School Competition
Many of the arguments against greater intra-school competition share a similar rationale to those
favouring a large compulsory core in secondary schooling. However, more within school choice may
also induce the dysfunctional effects that have been associated with increased between school choice. In
particular, increased cream-skimming and the resulting redistribution of peer group effects may increase
the inequality of educational outcomes within schools, whilst increasing the extent of ‘rat race’
competition between teachers.
As Davies and Edwards (2001) show, the debates surrounding the introduction and
subsequent development of the National Curriculum in England have often been
motivated by a desire to make the school curriculum better reflect the needs of the
economy. What has been less clear in these debates is the extent to which a large
common curriculum core is consistent with those needs (Adnett and Davies, 2002).
Gradstein and Justman (2000) argue that one advantage of state schooling with a large
compulsory core curriculum is that it instils a common cultural norm and set of ethical
values in the population. Developing civic virtues reduces future enforcement costs of
compliance with those norms and values. Uniform state schooling in a common
culture also generates network externalities, which lower economic transaction costs
and stimulate aggregate economic activity. Differences in customs, language or
religion could in the absence of uniform schooling reduce the efficiency of production
and exchange. Finally, common state schooling promotes social cohesion, reducing
tensions between different population groups and avoids wasteful rent-seeking
activities.
16
Additionally, a common core curriculum at secondary level may enable improved
monitoring of performance and establish relative standards, thereby reducing
variations in school quality. It may also provide a high quality, low cost signal to the
labour market of the relative academic achievements of entrants. Debates on
educational reform in both Europe and the US have recently used such arguments,
supported by empirical evidence to justify the case for curriculum-based external exit
exams (Bishop, 1997, Gundlach and Wössman, 2001). Taken together these
arguments suggest that there may be an economic rationale, in addition to cultural,
social and political factors, for restricting curriculum choice and requiring a common
core curriculum. However, the question remains whether there are any disadvantages
of marginally increasing the degree of curriculum choice within schools.
Increased choice within schools, as argued above, increases the pressures on teachers
to raise the level of their student’s academic attainment. However, given asymmetric
information, the difficulty of isolating teachers’ contribution to student attainment
levels and the inability to measure all schooling outputs, dysfunctional effects are
likely. Teachers have an incentive to raise their student’s attainment by indulging in
syllabus-switching, recruiting high ability students (cream-skim) and re-allocating
their effort towards the examination performance of their borderline students rather
than raise their overall effectiveness. Whereas the re-allocation of a given effort level
could be deemed desirable, the other behavioural responses distort outcomes and
redistribute peer group effects in a way likely to increase the inequality of the
distribution of those outcomes. Given the presence and format of school performance
tables, as argued above, heads may also have an incentive to behave opportunistically
17
and re-allocate teachers and/or distort student choice to favour subjects with higher
pass rates.
As with the introduction of performance-related pay, greater within school
competition is likely to reduce teachers’ collegiate ethos and lead to a switch from
producing school-wide schooling outputs to those which are attributed to individual
teachers (Adnett, 2002). Whether this reduced co-operation between teachers leads to
a significant reduction in valued educational outcomes, remains an important and
unanswered empirical question. Given current concerns in England, the impact of
greater intra-school competition on teacher workloads is another important
consideration. A PricewaterhouseCoopers report (2001) identified the relatively high
workload of teachers in England and the government has announced that any future
schooling reforms must not increase workloads further.
The growth of extensive unpaid overtime has become a common feature of many
managerial and professional labour markets. Whilst for teachers this practice may
sometimes reflect public service motivation (Francois, 2000), it may also reflect an
inefficient ‘rat race’ equilibrium (Landers et al., 1996). The latter are characterised by
a tendency for promotion to be on the basis of commitment, ambition and propensity
to work hard, which given asymmetric information may all be proxied by actual
working hours. In such circumstances, adverse selection issues may encourage
teachers who desire short hours to adopt the camouflage of working longer hours at
the current wage. Working hour norms may therefore become inefficiently long and
fail to adjust to the changing demographics and preferences of the school’s workforce.
18
Increased within school choice may by reducing co-operation and increasing rivalry
amongst teachers further exacerbate these workload problems.
In this section we have outlined an economic rationale for a core curriculum and
identified some likely dysfunctional effects of increasing within school choice. We
now need to relate these arguments to our previous analysis.
6. Conclusions and Future Research
Orthodox economic theory predicts that well-informed students are likely to choose
more effective teachers when given the opportunity to do so. Assuming no class size
effects on student attainment, average attainment would increase as a result. With no
change in the number of classes, this represents a net welfare gain, subject to any loss
or additional gain arising from the redistribution of peer effects. In circumstances
where small classes may be discontinued, teachers also face an incentive to increase
their effectiveness as this affects opportunities to teach high-prestige examination
classes and, ultimately, job security. This argument suggests that pupil attainment will
increase as governments devolve curriculum choice and pupils are better informed
about teacher effectiveness.
However, given the multiple outcomes of schooling, the inability to measure those
outputs accurately and the existence of multiple principals and agents and the
associated information asymmetries, any education policy initiative is likely to
generate dysfunctional effects. Increasing intra-school choice is unlikely to be
different in this respect to other market-based reforms. Thus, from the point of view
19
of the student a teacher’s effectiveness is enhanced if the latter choose an easier
syllabus or attract high-ability students, although teachers who follow such strategies
may not be improving social welfare. In addition, schools aiming to maximise league
table position face an incentive to encourage students to choose easier subjects
regardless of the impact of this choice on their long-term welfare. There may also be
systematic differences in the typical characteristics of more and less well-informed
students raising questions of equity and implications for the extent of co-operation
between teachers and their overall workloads. Therefore, any benefits from marginal
increases in within school choice would need to be weighed against costs. It is
therefore important to know the scale of the benefits in terms of higher attainment and
how far the possible disadvantages of market processes acting between schools also
apply to markets within schools. It also important to identify potential dysfunctional
effects, and take these into account at the policy design and implementation stages.
Governments affect subject choice directly when making a subject compulsory for all
students or indirectly by changing the context within which subject choices are made
(e.g. through the introduction of performance-related pay for teachers and the design
of school performance tables). In England, successive changes to the National
Curriculum requirements for 14-16 year olds have created a natural experiment in the
impact of competition through subject choices in Geography and History. The 1988
Education Reform Act made Geography and History as well as Science compulsory at
Key Stage 4. However, whilst the requirement for all Key Stage 4 students to study
Science has remained, the requirements to study History and Geography have been
steadily relaxed. In 1991, before the implementation of the Key Stage 4 regulations,
the requirement was reduced to the study of either History or Geography. In 1995 this
20
requirement was removed altogether. Schools chose to respond to these regulatory
changes in different ways. Some schools introduced a requirement that all students
study History and Geography in advance of the regulations and many have maintained
a requirement that pupils study either History or Geography after this regulation was
rescinded. Such variations at school level allow a comparison of the effects of
compulsion, partial and full choice with respect to these subjects in Key Stage 4. An
analysis of the consequences of these changes on relative student attainment is the
next stage of this project.
21
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