Abstract

This chapter focuses on education market systems, as one of the key issues for policy in education. Research suggests that a coherent market structure for schools is very important for attainment. The key elements are: assignment of pupils to schools and admissions policies, and school accountability and autonomy. The central element of the market structure is the assignment mechanism, which allocates each child to a school. There are different such mechanisms available: school choice, neighbourhood schooling and elite schooling or ‘tracking’, which assigns pupils on the basis of an exam. Other key elements include governance rules and hierarchy: school accountability and school autonomy. Finally, the nature of school leadership is tied up with the degree of autonomy – leaders are far more important in autonomous schools.

Introduction

Education is crucially important for many of the policy outcomes that citizens and politicians care about. At an individual level, your education affects your earnings, your employability and your chance of succeeding in life starting from a disadvantaged neighbourhood. It also affects your health, future family structure, intellectual fulfilment and other aspects of a good life. At a national level, a country's stock of skills matters hugely for its prosperity and growth rate. The distribution of skills is a big determinant of inequality, and the relationship of a person's skills to their background is central to the degree of social or intergenerational mobility.

Providing education costs a lot: on average in 2011 OECD countries spent over 6 per cent of their GDP on educational institutions; and it accounted for almost 13 per cent of total public spending in the OECD (http://www.oecd.org/edu/Education-at-a-Glance-2014.pdf), so governments are keen to make it as productive as possible. And schooling takes up a lot of time in young lives – if you're under 20 years old, being at school, thinking about school and doing school work take up a huge fraction of your time awake, on average perhaps around 10,000 hours in school over the OECD. And in older lives too, parents of school-age children also spend a lot of time, energy and stress worrying about their child's education.