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The state should send many more poor children to private schools

29 July 2014

Better capital makes us richer. That’s uncontroversial when it comes to fixed capital like machine tools and computers, but it’s also true of human capital. Better educated workers create more productive jobs, increasing the total amount of wealth in an economy.

In a new Adam Smith Institute report released today, Incentive to Invest: How education affects economic growth, we found a very significant relationship between improvements in education and growth. In our model, a 10 per cent increase in TIMSS Advanced test scores generates a long-term 0.85 per cent increase in annual economic growth. We argue that getting more children into independent schools through vouchers may be the easiest way of improving outcomes, and thus growth.

We attempt to show causation (as opposed to mere correlation) by isolating where the effect is coming from. Independent schools are related to growth but only through increasing educational quality. So if independent schools and growth are related, that means that educational quality is causing growth and not the other way round (nor through another, hidden, factor).


Interestingly, we find no such relationship between the quantity of education and growth – adding years to schooling has no impact on growth at all unless the extra school time improves test scores (which it often does not). Similarly, spending more public money on education often does not seem to do very much to the quality of education students receive, and so it has little to no effect on long-term growth.

The easiest way to improve educational outcomes for secondary school students may be to expand access to the private sector, which has shown to improve education quality by widening choice (and so making a better match between the student and the school) and increasing quality through competition between schools.

The long-term impact of a change like this could be dramatic. If, since 1960, England had sent as many children to independent schools as they do in the Netherlands (where 66 per cent of children now go to independent schools), our GDP per capita would be approximately £5,800 higher.

There are two mechanisms to do this. The assisted places scheme, which paid for children from underprivileged backgrounds to attend selected independent schools, was scrapped largely for political reasons under the Blair government. And, more radically, the introduction of a formal school voucher system, like the one outlined in a 2013 report by the Adam Smith Institute and the Centre for Market Reform in Education, would give any family the option of sending their child to an independent school regardless of the child’s test scores.

The case for expanding access to private education for the poor is often made on the basis of the welfare of the child. Just so. But in this report we offer a second important argument: in the long-run, better education through expanded private education could boost living standards for everyone.

Sam Bowman is Research Director at the Adam Smith Institute

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  • itdoesntaddup

    There are of course schools for “Tim, but Dim” – usually known as minor public schools. Then there are fee paying remedial schools such as Summerhill. It isn’t all about ousting Wykehamists from their scholarships with oiks.

  • derekemery

    The public sector is full of left liberals as the lifestyle is massively attractive to them and have been termed the blob.
    The blob has always been against meritocracy and therefore against performance determining life chances.
    The blob like the EU wants equality of opportunitiy which means selection based on class/sex/race and not on performance. They will always berate meritocracy because this does will never guarantee selection in proportion to the precentages of sex/class/race that left liberals mandate, especially as adult intelligence is around 80% inherited.
    That blob do not want better schools in any form because this will allow selection of those that are more able gaining top positions in the world.
    The blob has managed to lower UK educational performance down to the middle of OECD tables. Hence the job is only half done. WE need to be firmly at the bottom of any performance tables before true equality can be assured.

  • WimsThePhoenix

    What is the point of this whilst preventing a return to grammar school selection?

    Sending intellectually incapable kids to private schools will achieve precisely nothing, except perhaps to deter people from sending their kids there – possible a cunning way to kill them off – unless there is some form of academic selection. If so, then a return to grammar schools makes far more sense, providing that there are two break points, as originally defined, whereby the middle section of the IQ curve is selected for technical/craft schools, the top section to grammar and the least capable to some form of remedial education with basic skills only and a lot of physical activity.

  • Uppity Parent

    Sending poor children to private schools isn’t the answer – destroying the teaching unions is. The government needs to do to the teachers what Thatcher did to the miners, and follow it up by taking education out of the hands of councils, and replacing all governing bodies – which are made up largely of status-seeking local worthies – with directly elected parent councils. Gove’s ‘reforms’ to school governance have left many governing bodies in the hands of unelected cabals, what they need is to be composed ENTIRELY of elected parent governors.

    97% of working class parents want their children to go to university – TRUST PARENTS, take control of schools away from adults feathering their own nests, managing expectations and patronising the poor, and give it to people who genuinely want improvement.

    But above all else, smash the teaching unions. Anyone want to help me set up a parents union?

  • anyfool

    Public school education for kids in care, would be cheaper than council care homes, probably a lot safer.

  • EppingBlogger

    If the state took a significant number of places at private schools (confusingly for foreigners, known as “public” schools in the UK), would that not result in their ceasing to be independent. Is that the sub-plot.

    Dave won’t allow any more Gammar Schools and the Conservatives are determined the ones we have will not flourish, so now they want to nationalise the only remaining challenge to state hedgemony over education.

    • WimsThePhoenix

      That is because Cameron is a closet Marxist.

  • David B

    Labour Shadow Cabinit Ministers will hate this. There children will have share their public school with rif raf

  • evad666

    Perhaps if the illiberal elite had not been so set against direct grant schools?

  • MaryJLingle

    We argue that getting more children into independent schools through vouchers may be the easiest way of improving outcomes, and thus growth.

  • Jim Station

    Why don’t we just bring back grammar schools. Comprehensive education is doing no-one any favours. Grammar schools would not require bursaries or private school fees to be paid by the state.

  • solly gratia

    So do non-disadvantaged children give up their places to accommodate these, or do we have new schools, which will attract those with money to move to the area so that once again you have to crow-bar children into it. It seems like a wholly utilitarian analysis based on the idea of processing children into worker units. what is the selection criteria? How do you make the argument for funding expensive independent education for some, while telling others to get on with the state system, even though all pay the same council charge?

    Wouldn’t it be better to encourage parents with the idea of putting their children’s education first, and encouraging the independent sector to offer more bursaries. but it should be for those who can make the best use of it.

    Sending children there regardless of the child’s test scores could be a nightmare for them, even if it doesn’t factor into any utilitarian book-keeping equation; and it will mean even more demand on the sector from parents just wanting their children at a ‘good school’ regardless of the benefits to be drawn from it.

    Bring back grammar schools, bring back 11+ or similar, and have a way of moving children who later show talent, or lack of it. And reduce the number of places at Uni; bring back polytechnics. That’s how Germany built its economic miracle.

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