Making Sense of Education and Training Markets: Lessons From England

Abstract

Policy discussions in the United States around markets in education frequently lack an empirical base. However, for nearly twenty years reforms in England have emphasized market-like mechanisms to spur competition among providers and choices among consumers. We examine the research findings about English reforms in six areas. Supply-side reforms include efforts to enhance competition among institutions, to promote efficiency through subcontracting, and to mimic market incentives through performance-based funding. Demand-side reforms include a variety of vouchers as well as other mechanisms to enhance parental and student choice, including access to information. Finally, we discuss several equilibrating mechanisms intended to bring demand and supply into equilibrium. The English examples clarify the limitations of the quasi-markets introduced under current conditions. However, they also raise the possibilities of designing policy around strong markets with more competent suppliers and demanders of education and training services, as a way of escaping the conventional dichotomy of institutional versus market reforms.