For profit advocates hit back


The IEA, the right wing think tank that promotes private enterprise, the free market and the profit motive, has a bright young Swedish academic on its staff

Gabriel Sahlgren is busy promoting profitmaking in the state sector. He is something of an expert, unsurprisingly, on the Swedish Free school model. Many Swedes are perplexed about how heated and polarised the debate is here on their school system. They are altogether more sanguine it seems, than we are , about the existence of  profitmaking schools within their  system.

Research on Swedens Free schools can be found to support both both the pro and anti  free school lobbies. Fertile ground, indeed, for cherry picking.

Sahlgren says that the best papers on the Swedish voucher reforms have thus far displayed only short-term gains from these reforms. Until now, that is.  In Sahlgrens view Böhlmark and Lindahl,  are the authors of the most convincing  recent research.

Their results,  according to Sahlgren,  show the impact of free school competition on pupils in both free and municipal schools, indicating that a 10 percentage-point increase in the share of 9th-grade pupils attending free schools in the municipality generates (1) about a 2 percentile rank point better test score in mathematics and English; (2) a 2 percentile rank point better performance in mathematics and English in the first year of upper-secondary school; (3) a 2 percentage point increase in the share who attend university; and (4) four more weeks of schooling on average.

Indeed, this is the first paper that finds long-term positive effects from a national voucher programme, while also presenting results indicating that grade inflation does not bias their findings.

Sahlgen writes ‘Comparing the results in ninth grade with the authors’ earlier results, we see that the impact is about twice as strong. It should also be noted that they only estimate the impact of ninth-grade shares of free schools pupils. In prior papers, they found that using the overall share of free schools as a measure of competition made the coefficient double in size (to about the same effect as in this paper). While it is questionable whether the overall share of free school pupils induces competitive incentives – at least immediately – this indicates that the above-cited estimates are lower bound.’

This is also the first paper – according to Sahlgren – that separates the general-equilibrium impact of for-profit and non-profit competition on achievement. They find no significant differences. This is strong evidence that both for-profit and non-profit competition is equally good at raising achievement. The key difference is the ability of for-profit actors to mobilise capital as well as scale up – thus providing more competition across the board. Michael Gove ,Sahlgren says, should sit up and pay attention.Gove has  so  far resisted pressure from the IEA, Reform and Policy Exchange think tanks to introduce profitmaking schools into the state sector even though  many believe that it would breathe much needed life into the faltering Free school programme here (faltering mainly  due to a lack of capital and  practical problems in finding sites for new schools)

It is important to note, says Sahlgren, ‘ that about 70-80% of the positive impact does not stem from the fact that free schools are better than municipal schools – but rather that competition forces municipal schools to improve. It also turns out that the effects are not significant until after about one decade after the reform. The authors argue that this is because free schools were a relatively marginal phenomenon until the early 2000s. However, it is also important to point out that the pupil population kept growing until 2003, so whatever competitive incentives increased for municipal schools remained marginal. The pupil population began decreasing in 2003, which coincides with the stronger increase in the free school share and also achievement. It is thus not surprising that it took about ten years before competition effects kicked in.’

This, concludes Sahlgren, ‘clearly demonstrates that it takes time before competitive incentives have an impact – which has implications for how we evaluate other school choice programmes. Moreover, it indicates that competition is the key mechanism behind producing better outcomes, not the fact that some schools are better than others. It also shows that for-profit schools are just as good as non-profit schools when it comes to raising the overall attainment levels in a voucher system.’

Independent Schools and Long-Run Educational  Outcomes: Evidence from Sweden’s Large Scale ; Voucher Reform IZA DP No. 6683

June 2012; Anders Böhlmark  Mikael Lindahl

Acknowledgements to the IEA






  1. The heated debate here which perplexes the Swedes, is one side effect of a divisive political stance in which teachers (and indeed other “caring professions”) are encouraged to align themselves against business, without any real grasp of either business ethics or practice. Larry Cuban has run a fascinating series on his blog recently, on the same phenomenon in the States.

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