When is competition between schools beneficial?

Abstract

In most school systems, over 50% of 15-year-olds students attend schools that compete with another school to attract students from the same residential area. Across countries and economies, performance is unrelated to whether or not schools have to compete for students. When choosing a school for their children, parents look at a range of criteria; for disadvantaged parents, cost-related factors often weigh as much as, if not more than, the factors related to the quality of instruction. School systems with low levels of competition among schools often have high levels of social inclusion, meaning that students from diverse social backgrounds attend the same schools. In contrast, in systems where parents can choose schools, and schools compete for enrolment, schools are often more socially segregated.