Many education systems around the world are looking for ways to give parents more choice over where they send their children to school. Proponents of school choice defend the rights of parents to send their children to their preferred school, whether because of the quality of the school, the school ethos or religious denomination. Expanding school choice, they argue, can stimulate competition and encourage schools to innovate.

But opponents argue that this type of market-based system tends to skim wealthier students from the state school system, resulting in a network of socially and culturally segregated schools. Critics also say that voucher systems divert public resources to private providers, leaving state schools with a disproportionate number of disadvantaged students and tighter budgets to support them.

What does OECD evidence show?

Across OECD countries, two out of three parents of 15-year-olds say they have some form of school choice. But what this means varies widely in practice.

For example, for families in rural, poorer areas, distance might be a big factor in determining the extent of choice. For other families, cost might be an important factor in how choice is exercised.

In both of these examples, where parents’ choice is limited by concerns about distance or cost, students are likely to be low performers, even after accounting for their socio-economic status.

School systems that use vouchers allow families to seek a place in either state or private schools. But there is an important distinction between schools that are publicly run and those that are publicly funded.

Across OECD countries, 84% of students attend publicly run state schools, 12% attend schools that are private but government-funded, and 4% are in independently funded private schools.

Private schools in Finland, the Netherlands and Sweden receive nearly all of their resources from the government, and they don’t charge additional fees. In Hong Kong (China) and the Slovak Republic, more than 90% of funding for private schools comes from public coffers.

But in Greece, Mexico, the United Kingdom and the United States, less than 1% of funding for private schools comes from public sources.

This matters because in those countries where privately managed schools receive larger proportions of public funding, there is less social segregation in the school system as a whole.

But there are some complicating factors. Publicly funded private schools might charge additional fees – making them accessible only to wealthier families and thus undermining the principle of choice. So public funding, such as from vouchers, may fail to widen access to private schools unless rules on tuition fees are also in place.

In addition, if private schools invest public resources to improve their quality rather than to expand access, government subsidies can exacerbate inequities in education. This is one of the reasons why abolishing substantial add-on fees in a voucher system can reduce performance gaps between rich and poor students.

The way vouchers are targeted at students can have a big difference on their impact. Vouchers that are offered to all students (universal vouchers) can help expand the choice of schools available to parents and promote competition among schools. School vouchers that target only disadvantaged students (targeted vouchers) can help improve equity in access to schools.

For school systems where public and private schools receive similar shares of public funding, the performance gap related to students’ socio-economic status between pupils in state schools and those in private schools is twice as large in those systems that use universal vouchers compared with systems that use targeted vouchers. Regulating private school pricing and admissions criteria also helps limit social inequity when vouchers are used.

OECD evidence also shows that schools with selective admissions criteria tend to attract better-performing students of higher socio-economic status, regardless of the academic quality of the school. Given that better-performing students are less costly to educate and can make schools more attractive to parents, such selective intake can give schools a competitive advantage.

Thus, allowing private schools to select their students gives them an incentive to compete on the basis of exclusiveness, rather than on the basis of the extra value they can add. This can undermine the dynamics of competition and diminish the positive effects it may otherwise have on the quality of education provided.

The international evidence also points to selective admissions as a source of greater inequality and stratification among schools. The social sorting of students occurs not only because of admissions rules and tests, but also because of parental self-selection and more subtle barriers to entry.

Simply put, vouchers work well in some systems and badly in others. OECD evidence shows that the success of school vouchers in offering meaningful choice to parents and students depends on the regulatory framework in place. School choice should not be offered at the expense of equity in education opportunities.