The OECD’s Programme for International Student Assessment (PISA) represents a commitment by governments to monitor student achievement within an internationally agreed framework. In the decade since its first report was issued, PISA has become the most comprehensive and rigorous student assessment programme in the world. The countries participating in PISA together make up close to 90% of the global economy.

In recent years, an increasing number of education systems in OECD and partner countries have welcomed the involvement of private entities, including parents, non-governmental organisations and enterprises, in funding and managing schools. Part of the interest in broadening the responsibility for schools beyond the government is to provide greater choice for parents and students and to spur creativity and innovation within schools, themselves. This report examines how private involvement in managing and funding schools is related to socio-economic stratification between publicly and privately managed schools.

The great public benefits of education have historically prompted governments to assume the primary role in managing and funding schools. Recently, a growing interest in improving school quality and student outcomes, and a quest for greater school choice for parents and students, and for more creativity and innovation in the schools, themselves, have challenged the notion of government’s primacy in education (OECD, 2006; Brewer and Hentschke, 2009). This trend, emerging in a number of countries, is based on the belief that the public interest in education can be better served by also involving private entities, including parents, non-governmental organisations and enterprises, in addition to government agencies, in managing and funding schools.

This chapter describes public and private involvement in schools from the perspectives of management and funding.

This chapter examines the differences in the socio-economic backgrounds of students who attend publicly and privately managed schools, and how these differences vary across countries. The chapter also analyses how various system characteristics are related to socio-economic stratification.

This chapter discusses how different types of public funding, particularly universal and targeted voucher systems, are related to socio-economic stratification.

Other reasons why privately managed schools tend to attract socio-economically advantaged students, including admittance criteria and the quality of education in the schools, are examined in this chapter.

This report examines how public and private involvement in managing and funding schools is related to socio-economic stratification between publicly and privately managed schools. In a few countries, the average socio-economic background of students who attend privately managed schools is similar to that of students who attend publicly managed schools; in other countries, there is a great disparity in the socio-economic intake of publicly and privately managed schools.

In Ireland, the management of schools at second level is complex.1 Virtually all second-level schools in Ireland were owned and controlled by religious entities until 1931. The establishment of Vocational Educational Committees (VECs) in 1931 (Government of Ireland, 1930) introduced a new and separate tier of vocational schooling. The introduction of free education in 1967 (Department of Education, 1966) occurred alongside rapid growth in participation in second-level education, and these developments, coupled with the fact that students in vocational schools could take the national examination, given after Grade 12, to obtain a Leaving Certificate, blurred the distinction between the education offered in privately owned and managed schools and vocational education. Community and comprehensive schools, which began appearing in the late 1960s, added other kinds of ownership arrangements to the education system, although they represent only a minority of schools at second level (Coolahan, 1981).

In the 1980s, Chile reformed its education system by introducing profound changes in how schools are administered and funded. The aim of the reforms was to decentralise school management and introduce school choice (Beyer, 2000). The administration of state schools was devolved to municipalities, and special regulations for teachers’ contracts were abolished.1 Chile adopted demand-side subsidies to finance municipal schools and government-funded private schools.2 This reform was guided by various principles: school choice improves the welfare of families who send their children to school; the social costs of implementing demand-side subsidies are minimal; privately managed education is inherently more efficient and cost-effective; municipal schools will also become more effective by competing for students; and a competitive education system is more likely to improve social mobility for children from low-income families (Carnoy, 1998; Hsieh and Urquiola, 2006; Cox, 2003; Beyer, 2008).

The Netherlands has by far the largest number of students enrolled in privately managed schools among all OECD countries. PISA 2009 data show that only one-third of students attend publicly managed schools, while around twothirds of 15-year-olds attend privately managed schools. The majority of these students attend privately managed schools that receive over 90% or more of their core funding from government agencies (OECD, 2010a). In fact, there are few privately managed schools that have chosen not to receive public funding, accounting for less than 1% of primary and secondary schools (Waslander, 2010).