Does profit-oriented ownership in the Swedish school sector affect its quality negatively - a quantitative panel study
Abstract: A heavily discussed topic in Sweden the last year has been whether profits within the welfare sector should be allowed. In this paper we investigate how privately owned schools affect the Swedish school quality, focusing on profit-driven actors' impact. The effect is isolated in a two-stage analysis using fixed effect regressions. Firstly, the direct impact is analyzed by regressing quality on ownership types. The second stage evaluates the spillover effect that competition from private schools creates by regressing public school quality on ownership concentration. School quality is categorized into (1) Student outcome; grade point average on the national proficiency test and grade deflation/inflation and (2) Resources; number of students per teacher and share of teachers with a pedagogical education. While the economic impact is small, private schools create the same or better student outcome while using less resources, however with the downside of being prone to inflate grades. Thus, differences between ownership types are apparent but might be driven by agendas, student characteristics or model specifications. For the indirect spillover effect we find no significant result that an increased competitive environment affects public schools in neither a positive nor a negative manner. Consequently, our results indicate that the Swedish school sector is not negatively affected by the presence of private owners, even if they are profit-driven.
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