Private schools gain market share despite downturn

As the GFC took hold in late 2008, some people were predicting a trend back to government schools. ‘Parents abandon private schools as downturn bites’ said a SMH headline.

I was sceptical, predicting a moderation in the trend to private schools rather than a reversal of the trend. In my view, religious diversity, discipline issues, growing affluence, and increased long-term importance of education will all, other things being equal, continue to favour private schools for the foreseeable future. Cyclical events like recessions may temporarily affect the affluence factor, but will not change the basic trend.

The preliminary 2009 schools data, released today, supports my scepticism about a trend back to government schools. Despite a small economic downturn, Catholic schools grew at more than twice the rate of government schools, and independent schools grew at around 5 times the rate of government schools.

Overall, private schools gained .24% of market share. Consistent with my prediction of a moderation rather than a reversal this is below the long-term trend. The annual average private school market share gain was .39% during the Howard years.

13 Responses to “Private schools gain market share despite downturn

  • 1
    charles
    January 28th, 2010 17:57

    With the publication of the NAPLAN results I wonder if the trend continues. They pretty much indicate that you don’t actually get much for your money. Spending the money on a move to an upper middle class area is a far better use of your funds.

  • 2
    charles
    January 28th, 2010 17:59

    Oh dear; even the reporters in the Australian are smart enough to work it out. This will never do.

  • 3
    Andrew Norton
    January 28th, 2010 19:12

    My old (private) school is doing a bit better than ‘similar’ schools, though given most of these are interstate I don’t think they need worry about my school’s slight NAPLAN advantage. My main alternative option in those days of Mount Waverley High (now Mount Waverley Secondary College) is getting a few red lines but still respectable results compared to national figures.

    I agree you’d expect above way above average for $20K a year. On the other hand as I noted in my post (backed by research) academic results are not necessarily the main reason why parents choose private schools.

  • 4
    charles
    January 29th, 2010 02:21

    I agree, I spent the 20k a year on my kids, because I married a private school girl and the music education was pretty good. Would I do it again. No. I think for all round student support Ballarat High School and Ballarat Grammarr are pretty close and you can buy a hell of a lot of music lessons for 20k. If I did it again it would be an investment property near Ballarat High.

  • 5
    conrad
    January 29th, 2010 03:47

    “My main alternative option in those days of Mount Waverley High”
    .
    Not the now closed Syndal Tech? You never know what life would have been like digging holes.

  • 6
    Rajat Sood
    January 29th, 2010 04:00

    I’ve suggested to some friends that they move to the Balwyn High catchment zone to avoid paying $240k ($20k*2*6) for MLC, but they simply refuse to move “out there” (they live in Hawthorn East – hmm). Moving to a good public school catchment area not only avoids fees but effectively buys you a stake in future private schoool fee movements. To the extent that the value of a good public school education is capitalised into local property prices, and private school fees increase faster than property prices generally, property prices in areas with good public schools should rise faster than property prices elsewhere.
    Another thing is that many parents have been brainwashed into thinking that girls can only do well in a single-sex school, without thinking there might be some sample bias affecting those findings.

  • 7
    Andrew Norton
    January 29th, 2010 04:22

    “Not the now closed Syndal Tech?”

    Ha ha. The school I actually went to was right next to Syndal Tech, but for obvious reasons I never considered going there.

  • 8
    Andrew Norton
    January 29th, 2010 04:25

    Here is Andrew Leigh and Ian Davidoff’s reserch on how good public schools are incorporated into housing prices.

  • 9
    Brendan
    January 29th, 2010 11:50

    Rajat – If your friends don’t want to move so far out, there is always University High School and Melbourne Girls’ College.

  • 10
    Rajat Sood
    January 29th, 2010 19:41

    Thanks Brendan, but I suspect they would be too far from doting and demanding grandparents.

  • 11
    derrida derider
    February 3rd, 2010 12:56

    “.. religious diversity, discipline issues, growing affluence, and increased long-term importance of education will all … continue to favour private schools” – Andrew

    Add in the elephant in the room here: “heavy subsidisation of those schools by government at the expense of the alternative” (ie government schools).

    Surely if you believe that such subsidisation is good policy then you should acknowledge, indeed welcome, the natural consequence. More kids at private schools is a feature not a bug from your point of view***. But to pretend that money’s got nothing to do with it – that somehow it must be because of greater recognition by parents of the virtues of private education – is a bit disingenuous.

    *** note, Andrew, I’m assuming you’re not one of those who fear contamination of these schools by the hoi-polloi.

  • 12
    Andrew Norton
    February 3rd, 2010 17:11

    DD – Clearly actual demand for private schools would be lower than it is now without subsidies. But the surveys we have suggest that if private schools were funded on the same basis as government schools – and depsite dishonest AEU propaganda to the contrary, it is an indisputable fact that every government school student gets a much greater public subsidy than any private school student – demand for them would be considerably higher than now.

    Curiously, even though the new schools policy change by the Howard government in particular should have boosted growth rates for private schools, average private school market share growth in the Hawke-Keating years was only very slightly lower than under Howard, and from memory if the early 1990s recession was taken out of the figure it was virtually the same.

    The Productivity Commission report last week also showed that between 2003-04 and 2007-08 real government funding per government school student had increased by 6.8%, while funding per private school student had decreased by .2%. Growth in private school spending is driven by volume, not increased per student subsidies.

    All this suggests to me that changes in school policy have not been the major drivers, though the policies developed since the 1970s have helped facilitate movements triggered by deeper economic, educational and cultural forces.

  • 13
    Peter Patton
    February 3rd, 2010 19:03

    derrida derider

    Those elite private schools that attract all the hype are only an extremely small % of private schools, and the amount of money they get per student is often less than 25% of the amount government school kids get. That 25% is surely more than just beer money, but if you’re looking to understand why parents choose to take their kids out of government schools, you’ll have to look elsewhere