Testing for Quasi-Market Forces in Secondary Education

This paper investigates the effect of introducing quasi-market forces into secondary education on the allocation of pupils between schools and on the exam performance of pupils. A unique database is used which covers all publicly-funded secondary schools in England over the period 1992–98. We find several effects consistent with the operation of a quasi-market. Firstly, new admissions are found to be positively related to a school's own exam performance and negatively related to the exam performance of competing schools. Secondly, a school's growth in pupil numbers is positively related to its exam performance compared to its immediate competitors. Thirdly, there is strong evidence that schools experiencing an excess demand for places have responded by increasing their physical capacity. Fourthly, there is some evidence of an increase in the concentration of pupils from poor family backgrounds in those schools with the poorest exam performance of schools during 1992–98 can be attributed to the introduction of quasi-market forces.