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Tuesday, September 06, 2005

Educational markets and social inequality

Sociology of Education
Autumn Term 2004 / 2005

What are the relationships between educational markets and social inequality?

Weijie NG
MA Economics of Education




Section A: Introduction

A remarkable parallel may be drawn between the fall of the Berlin Wall and the 1988 Education Reform Act (ERA) in England. The former announced the defeat of Communism and central planning, and the latter oversaw the end of the state as a monopoly provider of education. Both were followed by an assortment of liberalisation, decentralisation, and privatisation processes, all in the name of inducing competition amidst the blaring trumpets saluting the imminence of marketisation and capitalism. And both could be said to have led to disappointing consequences. The promised manna of improved efficiency has not been delivered: many transition economies almost uniformly saw their Gross Domestic Product plunge post 1989 (Blanchard, 1997); the replacement of the GCE and the CSE with an arguably easier, coursework based GCSE in 1986, and the abolishment of norm-referencing in 1987 (Gorard & Taylor, 2001) render grade inflation as a more plausible reason than marketisation for rising grades in GCSEs. At the same time, market reforms have been decried for leading to worsening social inequality. Indeed, it is very obvious in Russia, where oil barons such as Abramovich emerge with the financial clout to buy the whole English Premier League if he so wanted, while 35 percent of the population live under the subsistence minimum (Shorrocks & Kolenikov, 2001). At the same time, in the UK, numerous critics (Reay, 1998; Ranson, 1993), etc) have attributed widening educational disparities between the middle class and the working class to market reforms. However, the relationship between educational markets and social inequalities may not be quite so clear-cut. The arguments that markets would improve opportunities and outcomes for all, by writers such as Tooley (1995), are perhaps equally plausible, and the evidence on changes in the level of inequality is mixed. In this essay, the links between marketisation and social inequality will be explored, primarily by delving into the impact of the ERA and dipping into a couple of subsequent reforms as well as others elsewhere.

In Section B, what we mean by an educational market, with examples of market reforms in different contexts and of different characteristics, and aspects of social inequality, will be discussed. The market based reforms of the 1988 Education Reform Act, and subsequent related reforms, will be laid out in Section C, before using an examination of the impact of the market-based reforms of the ERA in England as a starting point to examine the links between educational markets and social inequality in Section D. Also, in Section D, the effects of marketisation in other contexts will be discussed. It will be concluded, in Section E, from both theory and evidence, that it is unclear how educational markets and social inequality are related to each other, and that the impact of marketisation could depend largely on the mechanisms of the market set in place, as well as the context in which markets are introduced. Also, there is a need to look at the bigger picture: whether the educational system can be expected to eliminate inequality in society, and the role of schools in a rapidly changing world.

Section B: What do we mean by markets and social inequalities?

In essence, a market may be defined as an area over which buyers and sellers negotiate the exchange of a good or service. An educational market, therefore, would be one where parents and their children are buyers and where schools are sellers, and both parents / children and schools negotiate the exchange of commoditised education.

Key to moving an educational system from the central planner to the market might include allowing for alternative systems of funding (Tooley et al, 2003). Alternative funding includes the use of education vouchers, which are tax funded certificates by which all parents are given the ability to pay for the schooling of their children at an educational institution of their choice, and school fees. A universal education voucher exists in Sweden, whereby all state and private schools are funded by municipalities to the amount of 85 percent of the calculated average cost per student (Tooley et al., 2003). Targeted vouchers, such as on the poor, or on low-income girls, are more common and have been used in places as diverse as Milwaukee, Colombia, Spain and Bangladesh.

Two more major manifestations of the marketisation phenomenon are possibly the fostering of greater school autonomy and the stress on competition between schools. In Singapore, the former started off with a form of privatisation, whereby top schools were allowed to become independent and were granted some control over staff deployment, finance, management and the curriculum, while the latter involved the endorsement of public ranking of schools, and the designation of more schools as autonomous schools (these have more autonomy than government schools but less than independent schools) to compete with the independent schools (Tan, 1998).

Now, what do we mean by social inequality? Liberals have two dominant notions of distributive social justice: equality of opportunity and equality of outcomes. The former may be summarised: ‘Unequal results are justified if everyone has an equal opportunity to succeed’ (Lynch, 1995). The existence of equality of opportunity depends on the presence of equal formal rights, equal access and equal participation (Gewirtz, 2001). The latter is more radical, and insists on pursuing equal results for different groups in society, and justifies direct intervention, including affirmative action programme, as a means to prevent disadvantage (Gewirtz, 2001). Lynch (1995) further proposes another ‘equality objective’, that of ‘equality of condition’, which ‘involve(s) the development of an egalitarian society which would be committed to the living conditions if all members of society, taking full account of their heterogeneity be it arising from gender, ethnicity, disability, religion, age, sexual orientation or any other attribute.’ It involves the equalisation of power and privilege. In an educational system, it could mean having equality in schooling conditions, equality in satisfaction with the educational process and an equality in the development of the potential of every member in society. Using these notions of social justice, social inequality would mean that the equalities of opportunity, outcomes and/or condition are not fulfilled in society. In this essay, social equality within education will be taken to encompass all three notions, although the focus would be on the former two, and social inequality would refer to non-achievement of these equality objectives.

Section C: A brief account of marketisation in England

On 16th October, 1976, the then Prime Minister James Callaghan in a speech at Ruskin College, Oxford, firmly called out for discussion by all parties, ‘parents, teachers, learned and professional bodies, representatives of higher education and both sides of industry, together with the Government’ (Callaghan, 1976) to address problems in the English educational system. He expressed unease with standards in schools and dubious new informal methods of teaching, among other things. In effect, his speech was an appeal for reform.

The Conservatives’ answer was the Education Reform Act, which promised that market forces would inject a new vitality into the system. Its aims were to:

raise standards, extend choice and produce a better educated Britain … by giving consumers of education a central part in decision making … (, by) freeing schools and colleges to deliver the standards that parents and employers want … (, by) encouraging the consumer to expect and demand that all educational bodies do the best job possible.

(Secretary of State for Education, Kenneth Baker
2nd reading of 1987 bill in formulation for 1988 ERA
Hansard, 1 December 1987)

Before going on to survey the effects of marketisation on social inequality in England, it would be useful to draw out various pertinent strands of the act. First of all, the Local Management of Schools (LMS) scheme was a measure designed to enhance the independence of schools by diminishing LEA control of schools. Under LMS, school governors were allowed to decide how to spend the delegated budget, and were responsible for the appointment, management and dismissal of staff. The whole point of LMS was ‘to decentralise decision making (from the LEAs) to school level’ (Levacic, 1995).

To increase competition between schools, the ERA also prescribed open enrolment. Funding also became based on a formula linked to student enrolment, and at least 75 percent of the Aggregated Schools Budget, i.e. the money delegated by the LEA to its schools, must be allocated according to the pupil number and their ages. Open enrolment and formula funding together meant that a quasi-voucher system is in place. The schools landscape was made more diverse and competition was also enhanced with the creation of grant-maintained schools and city technology colleges. The idea behind the increase of competition is that schools will endeavour to raise educational standards in order to attract pupils and hence funding.

It is important to note that the reforms of the ERA led not to an education free market, but to an education quasi-market, for which the distinguishing characteristics are ‘the separation of purchaser from provider and an element of user choice between providers’ as well as usually a high degree of government intervention (Levacic, 1995). In the UK, the government introduced a National Curriculum, which dictates the content of the curriculum in compulsory education, and testing on a grand scale, in order to inform parents and teachers what a child knows and understands, to indicate the achievements of schools generally, and to ensure the quality of the educational system. To ensure competition, leagues tables were to be compiled and published based on test grades obtained by pupils. Though such a mix of centralisation and decentralisation might at first glance appear to be purely the product of muddled thinking, it is the result of struggle, negotiation, compromise and reconciliation over short and long term strategies and goals between the neo-liberals and neo-conservative elements within the New Right dominant during the Thatcher’s years in power (Whitty, 1990).

Marketisation did not stop with the ERA, nor with the fall from power of the Conservatives. Under New Labour, market based reforms included an experimentation with nursery vouchers and an expansion of the specialist schools framework (Power & Whitty, 1999). Recently, the educational marketplace has been expanding even at home, with the increasing emphasis on home learning by New Labour in what McNamara et al (2000) called ‘the Blairite project of Total Schooling’. The value of homework has been repeatedly emphasised, and funding has been poured into activities such as homework clubs, which extend the reach of schooling into the leisure time of children (Scanlon & Buckingham, 2004). Parents are also increasingly pressured to ‘invest’ more in educational resources, such as home computers, study guides, early learning materials and private home tutoring, for their children.

Section D: What is happening to social inequality?

In a quasi-market system, there are many different threats to social justice, and a major concern among them is that of cream skimming (Glennerster, 1991). Since a school’s performance in the league tables is determined largely by socio-economic background and schools in greater demand can attract more pupils and hence more funds, a school may attract more funding by maximising the examination results of its pupils and it can do that at minimum cost by cream skimming students from higher socio-economic backgrounds. Evidence suggests that worries in England about cream skimming are real. Schools have been shown to seek out and select particular types of students, e.g. those from the middle class, or from South Asian backgrounds, based on their abilities to boost test scores, at the expense of the ‘less able’, children with Special Educational Needs (SEN) (Gewirtz et al, 1995), etc. A significant minority of schools, especially those with autonomy over admissions, i.e. voluntary-aided and foundation schools, had criteria which appear to cream skim, despite Labour government reform attempts since 1997, such as the introduction of the Code of Practice on School Admissions in 1999, to counter this phenomenon (West et al., 2004). More specifically, schools have been using interviews meant to establish the pupils’ religion to determine the presence or absence of other desirable characteristics, which might partially explain the different percentages of pupils eligible for free school meals in different types of schools: by religion, 11.4% for Church of England schools, 15.6% for Roman Catholic schools, 6.2% for Jewish schools and 6.5% for Sikh schools, compared with 16.1% for all other maintained secondary schools in England (House of Commons, 2001).

Another concern is that with the development of markets in education, schools may become increasingly pressured to restructure teaching, such as by introducing setting, in order to attract white middle class school children, who are viewed as ‘valuable commodities’ (Reay, 1998). Research has shown that there are negative consequences for pupils allocated to bottom sets since, for example, teachers for bottom sets tend to be less experienced and junior staff (Ball, 1981). Because pupils in bottom sets are predominantly black or white working class, and those in top sets may be ‘uniformly white’ (Gillborn and Gipps, 1996), this suggests that social inequalities based on race and social class are being exacerbated here. Indeed, when schools are ranked according to their percent of pupils achieving A-C grades, Gillborn and Youdell (2001) have observed an ‘educational triage’ syndrome, whereby schools ration their time and effort, and focus on pupils on the borderline between the D and C grades, at ‘the cost of judging some pupils (disproportionately Black and working class young people) as without hope’. Schools do not deliberately set out to further disadvantage the disadvantaged. Instead, to keep their place in the pecking order, schools have to maximise their measured output from limited resources, and therefore have no choice but to decide where best to concentrate their efforts upon. This decision is based on judgements on ‘ability’, which unfortunately, like IQism, is a ‘loaded, fallacious and highly dangerous concept … (that) … offers a supposedly fair means of condemning some children to second class educations’ (Gillborn and Youdell, 2001). Since pupils who are black, or who receive free school meals are considerably more likely, and more unfairly to be judged as lacking in ‘ability’, they are consigned to lower sets and lower tiers. It is to be expected that the educational divide can only widen with the continued misplaced belief in ‘ability’.

Sometimes, segregation of social class and ethnicity, it has been argued, is a result of privileged parents being more active or better in choosing desired schools (Tomlinson, 1997). Privileged ‘choosers’ are better at discriminating between schools, evaluating teachers, and interpreting league tables and Ofsted reports, because they have the necessary cultural capital and educational knowledge, and therefore come up trumps in the local schooling market. Such privileged ‘choosers’ are largely white and middle class (Ball et al., 1996). Working class parents tend to be either ‘disconnected choosers’ (Gewirtz et al., 1995) or ‘semi-skilled choosers’ (Ball et al., 1996). The former refers to those who lack car ownership, and are therefore geographically bound to their vicinity, and would settle for the local comprehensive. The latter refers to those who want to engage with the market, but who are likely to have poorer educational experiences themselves, do not have the knowledge or the skills to go about maximising their children’s educational opportunities and outcomes.

Segregation, it is feared, would lead to a hierarchy of schools forming, with high achieving middle-class white pupils in league table top ranked schools, and disadvantaged working class, ethnic minorities in inferior or ‘sink’ schools (Miliband, 1991). The Coleman (1979) report has emphasized the pre-eminence of peer group effects on educational attainment. One might expect a positive peer group to affect achievement directly, e.g. by helping each other with class work, or by studying together for the examinations, and to affect achievement via values, e.g. a propensity to be hardworking, etc. If the high achieving middle class children leave the local schools, it may be argued that a positive peer group effect is being taken away, and the remaining children would suffer and do less well. This is another way how social inequality, particular that in outcomes, might increase when there is an education marketplace.

It has been suggested, however, that it is not marketisation that has led to the inequalities prevalent in educational systems today. Tooley (1996) pointed out that there has been widespread concern over educational inequality, and seminal works on the issue were published thirty years ago, such as the Coleman et al. (1966) in the US, and Rutter et al., (1979) in the UK, long before any market based reforms were even on the agenda. At the time under state control, as now, parents have always been able to buy into better school districts and reinforce social inequality (Massey & Denton, 1988). With regards to Miliband’s (1991) concerns over sink schools, Tooley (1992) pointed out that accusations of schools as ‘sink’ and failing are not new and existed pre-ERA. It may be considered that, as yet, no school has really had to close down due to falling pupil numbers in the market system. As Hargreaves (1996) said, ‘Bad schools do not … die of their own accord through market forces: bad schools have to be murdered’. Uneven distribution of tax-payers funds was also already evident decades ago, with state educational spending on a child of a family in the highest socio-economic class about 50 percent more than that of his counterpart in the lowest socio-economic group (Le Grand, 1982). Moreover, inequalities in achievement have largely remained unchanged in the decidedly non-market comprehensive system which lasted for decades (Halsey et al., 1980). It is perhaps no wonder then that the welfare state has been condemned as a ‘middle-class racket’ (Gray, 1993).

Moreover, Tooley (1995) has asserted that the full potential of markets in education cannot be accurately assessed from studies of quasi-markets, or what he called ‘so-called market(s)’. The state educational marketplace, as it exists in England, is not a free market, since there is no price mechanism in operation, there is heavy regulation from the state in form of the National Curriculum and league tables, etc., and while the demand side has been liberated through per capita funding, the supply side, i.e. the provision of education, has hardly been freed from state control. As such, he dismisses criticisms of markets in education by writers such as Ranson (1993), whom he feels mistakenly uses arguments against the Conservatives’ ‘so-called market’ against markets in general. Just because the schools quasi-market as it is today is inequitable does not mean that education markets in general are inequitable.

Also, just because vouchers and quasi-vouchers have not reduced inequality does not mean that they cannot. Vouchers, much like hammers and nails, are tools, and their impact would depend on how they are used and what they are being used for. The primary focus of the classic Friedman (1962) voucher was to boost educational efficiency. Friedman’s proposal allowed for unconstrained choice by both parents and schools. This means that parents could choose to ‘spend’ their voucher at any school, and that schools were free to choose their intake and organisation. Topping up of the vouchers by parents, when they do not fully cover school fees was also permitted. Quite clearly, cream skimming could be a serious problem and topping up essentially meant that the taxpayer would be subsidising the education of the rich who are attending expensive private schools. Other voucher schemes, such as the liberal Jencks (1970) proposal, were much more concerned with equity. Topping up was allowed, places in schools were to be allocated by ballot and the value of vouchers was to be means-tested, i.e. larger vouchers would be tied to pupils from lower income families. It is true that the quasi-vouchers under the ERA did allow for additional funding based on quantitative measures of pupils’ special educational needs or social advantage (Levacic, 1992), but it is arguable whether this compensatory funding is sufficient. For equity reasons, as Glennerster (2002) put it, ‘(ideally), a school should be indifferent between accepting a child with lower potential or greater problems compared with another pupil.’ If the school were to receive sufficient rewards for taking disadvantaged and more difficult students, incentives to cream skim would be diminished and could be eliminated. Not only that, if vouchers such as Fernandez & Rogerson’s (2003) ‘means-equalising voucher’ are to be used, educational expenditures on children may also be equalised, if that is what society desires.

Using Hirshmann’s (1970) concepts of ‘voice’ and ‘exit’, Tooley (1995) goes on to argue that markets reduce the power of the middle-class vis-à-vis the working class. In any organisation, customers may express their dissatisfaction with its performance either ‘exit’, i.e. by leaving and stopping their custom of the organisation’s products, or by ‘voice’, i.e. by ‘express(ing) their satisfaction directly to management or some other authority to which management is subordinate or through general protest to anyone who cares to listen’ (Hirshmann, 1970). In an educational setting, this means that parents or pupils may express their displeasure with a school either by leaving it for another school, or by complaining to the head teacher, government or to the press. Under a non-market, bureaucratic system, ‘voice’ tends to be the only available recourse, while in a market system, both ‘voice’ and ‘exit’ are viable options. In the former system, the middle class can be expected to dominate, since it is ‘politically influential, skilled and adroit, …organised, … more articulate… (and) endowed with cultural power’ (Seldon, 1990) and are more capable at manipulating ‘voice’. The denial of markets to the working classes means that ‘exit’ is not permitted to them, and they are stuck with only ‘voice’, in which they are seriously disadvantaged. Though Gewirtz et al. (1995) and Willms & Echols (1992_ may argue that the middle class are relatively more adept at working the market, at least markets give the option of ‘exit’, where there was none before, to the working class, and allow them to ‘vote with their feet’ (Tiebout, 1956), to leave poor schools for better ones. Markets, then, could be the way forward, if social inequality is to be reduced.

The Blairite extension of the reach of the educational policy into the home, as laid out in Section A, may be expected to exacerbate educational inequalities, both in opportunities and in outcomes Given the difference in the level of economic resources between parents, children from middle class backgrounds may well be expected to surge ahead of their working class counterparts in the ‘digital divide’ (BECTA, 2001), and be further privileged through the ‘invisible’ purchase of home tutoring (Russell, 2002).

Econometric evidence on the level of equality of access to English schools has also been mixed. Gorard and Fitz (1998), using data on the eligibility for free school meals (FSM) as an indicator of poverty and examining the spread of eligible pupils across English secondary schools, calculated a ‘Gorard index’ and reported an initial increase in segregation in the first few years after the introduction of the 1988 market reforms, which was then followed by years of desegregation. They hypothesized that this was a result of a ‘starting gun’ effect, whereby more alert, perhaps middle-class, families responded rapidly and were quick to make use of increased opportunities to choose schools. However, other families soon learned their rights as well in the new educational landscape, and subsequently, the net result since has been less social segregation in schools, meaning that the system tends towards equality rather than inequality. Noden (2000), on the other hand, using the ‘isolation index’ instead, which measures the probability that a schoolmate, of a pupil eligible for free school meals, will also be eligible for free school meals, and the same data sets as in the Gorard and Fitz (1998) study, found that schools have actually become increasingly segregated from 1994 to 1999. It should be noted that both these econometric measures are flawed, in different ways. For example, the ‘Gorard index’ does not take into account ‘where the unevenness’ of the spread of FSM pupils is located (Noden, 2000), while the Noden index would increase, implying greater segregation, alongside general increases in the level of eligibility for FSM across the country as a whole, which suggests that the increase in the Noden index after 1994 could well be a result of worsening conditions in the local economy rather than in the education system. Such flaws remind us that these indices can only be indicators, and that they are not, and cannot be able to represent the level of segregation and inequality as a single number. Such limitations of statistics may have led Boyle (2001) to make this a simple but telling comment: ‘We take our collective pulse 24 hours a day with the use of statistics. We understand life that way, though somehow the more figures we use, the more the great truths seem to slip through our fingers. Despite all that numerical control, we feel as ignorant of the answers to the big questions as ever.’

If vouchers are thought of as harmful to equality, then school fees, intuitively, would probably be worse. They have in fact conversely helped to bridge the gap in some contexts. In many developing nations, even though education is publicly provided, the number of school places is low because governments are faced with financial constraints. School fees, when introduced in Malawi, actually helped to mobilise more resources for education, and allowed for a sizable expansion of education (Mingat & Tan, 1986). Moreover, the implementation of fees gave Malawian school much needed financial resources with which to offer means-tested bursaries to students from poorer backgrounds. This in effect means that school fees can be a tool with which to allow for those who can afford schooling to subsidise those who cannot, and thereby help to break down educational inequalities stemming from background financial disparities.

Section E: Strategy & context matter

It may be remarkably clear that the link between markets and social inequality in education is nebulous. There are convincing arguments why and how marketisation in the form of the ERA has widened the inequalities, but there are also equally persuasive assertions that it has not. Indeed, academics cannot even agree as to whether further inequalities have actually emerged post 1988. Looking beyond England, there are surprisingly positive consequences of the extension of Adam Smith’s invisible hand into education.

There is no one single way of marketisation and different countries have done it differently. The USA diversified the schools landscape by creating charter schools (Kane & Lauricella, 2001); Both Chile and Bangladesh used vouchers, but the former made vouchers universal, while Bangladesh only offered vouchers to disadvantaged girls (Tooley et al, 2003); Malawi introduced school fees while simultaneously offering bursaries to lower income pupils (Mingat & Tan, 1986), etc. The effects of different strategies, one may observe or postulate, are probably different. For example, if over-subscribed schools were not permitted to select, and legislation laid out that pupils were to be allocated to schools randomly out of a hat, the cream skimming problem might just disappear. It is therefore perhaps not markets, per se, but using Halpin and Troyna’s (1994) words, ‘the fine-grain detail of their implementation’, that impacts upon social equality in educational systems. This suggests that context matters very much. Ball (1994) proposed a ‘policy cycle’ framework of five contexts of policy-making with which to, among other things, analyse responses to and impact of policies: contexts of influence, policy text formulation, practice, outcomes and political strategy. Each of these contexts may affect the outcomes of market reform policies. Such policies do not exist alone and other policies and texts are in circulation at the same time. ‘The enactment of one (policy) may inhibit or contradict or influence the possibility of enactment of others’ (Ball, 1994). If setting did not exist as an option for schools to employ as a response to market reforms, the educational triage might not operate. With contexts being so important in the intentions embedded in, responses to and effects of marketisation policy, using Ball’s (2003) words, there is probably ‘no clear-cut class story of stark oppression and determinism’, and one’s attention should be focused on ‘subtleties and nuances’ rather than ‘stark and distinct patterns and relationships’.

The world today is increasingly becoming a global marketplace, and the market pervades all aspects of our lives in ways that many of us may find difficult to identify or understand. Somehow, the wines in fashion are made in Chile, our computers are manufactured in Taiwan, property prices in east London will probably depend on horse-trading between Olympics officials in Singapore next year and the price of air fuel can be cheaper than that of car petrol. Gone are the days of Communism and central planning, and societies today will not accept their return. If as Bernstein (1970) stated, ‘education cannot compensate for society’, it is unlikely that education can counteract or resist the flow towards a more marketised world. Therefore, perhaps education should embrace markets instead. It is all very well to envisage schools as a safe haven from the atomistic self-interested world of capitalism. However, the denial of markets in education might mean that young people leave school unprepared for the harsh real world. A balance needs to be found, and a balance that is acceptable.

Education has to be a mixture of haven and challenge. Reassurance, of course. Stability. But also incentive. At the very least you offer the kids support. You care for them. You offer them security. You give them an environment where they feel they can grow. But also make bloody sure you challenge them. You make sure they realise learning is hard. Because if you don’t, if you only make it a safe haven, if it’s all clap-happy, and ‘everything the kids do is great’, then what are you creating? Emotional toffees, who’ve actually learnt nothing, but who then have to go back and face the real world … Find that balance, it stretches you, it stretches you as far as you’ll go.

‘Skylight’, David Hare, playwright, 1998


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