Less spending and more choice for better student outcomes

Montreal, August 18, 2022 – With students across Canada preparing to go back to school, the MEI has just released a study on how to improve educational outcomes. Vincent Geloso, Senior Economist at the MEI, concludes that it is an illusion to think that the quality of education will be improved merely by increasing government spending. Whenever our educational systems are faced with a “crisis,” such as low graduation rates, bullying in schools, lack of preparedness for postsecondary studies, the poor physical condition of schools, etc., provincial governments tend to always favour throwing more money at the problem. According to the researcher, by making structural changes, it is possible to reduce spending on education while improving results.

“It’s how the money is spent that counts. Just increasing resources without asking ourselves questions sidesteps the crucial issue of how those resources are used. By downsizing the department of education, making school funding follow the student, and introducing greater school autonomy, government spending could actually fall while simultaneously securing considerable benefits for students,” says Vincent Geloso, author of the publication.

For better outcomes: decentralization and autonomy

Decentralizing management to the local level provides parents with more choice, with school autonomy generally leading to improved outcomes. Three main reasons explain these positive results:

• “One-size-fits-all” policies tend to yield disappointing outcomes for heterogenous populations. In contrast, more decentralization and autonomy for schools allows for customization.
• Parental involvement tends to be higher in decentralized systems, which tends to promote customization.
• Tying funding to parental choices generates strong incentives for schools to provide higher-quality customization.

Significant positive effects: academic, social, and emotional

Schooling is not only about scores on standardized tests for reading and mathematical abilities. Parents also consider the social environment in which their children will learn and whether it will be beneficial to their mental well-being. When parents exhibit strong preferences for mental health components of schooling, offering a greater space for school choice allows them to find a more balanced service. And indeed, the literature on parental choice in schooling shows a strong association with improvements in students’ mental health.

“In terms of performance, it is quite clear that meaningful increases in parental choice and school autonomy tend to yield positive outcomes. The cost-effectiveness advantage of American cities that provided greater educational autonomy was very significant. The principle is simple: The government concentrates solely on funding, and the provision of services is directed by parental choices. In addition to offering parents choice and exit options, decentralization and autonomy lead to greater effectiveness, whatever the amount spent,” explains Vincent Geloso.

It is important to improve both cognitive and non-cognitive outcomes for children, and educational policy play a crucial role in this regard. Policies providing choice for parents and autonomy for schools open the door to a better use of funds, for the benefit of parents and students across the country.

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The Montreal Economic Institute is an independent public policy think tank. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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