Even if a lot of frivolous schools do not flourish in a choice system, won't the children of uninformed or disinterested parents end up in mediocre schools?
A properly designed system of educational competition and choice would not relegate the children of apathetic or uneducated parents to mediocre schools. To begin with, many of the benefits of a market can be enjoyed by consumers regardless of their sophistication or level of information. In a competitive system, schools would recognize that because many parents and students are making informed choices, a school that did not strive to meet demands for quality would risk losing financial support. Hence all schools would be encouraged to improve, and parents who knew little about school quality, and enrolled their children in schools based only on geographical proximity, would nonetheless know that their schools had survived the competitive test. The uninformed parent would be served in much the same way as the hasty shopper in a supermarket: even the shopper who pays little attention to unit prices or to other indicators of value is well-served by the market – by the informed choices of millions of shoppers and the competitive pressures on producers to serve those shoppers best. This is not to say that some uninformed parents would not be taken advantage of by some schools in the short-run. But in the long run, competitive pressures would tend to force out of the market schools that did not serve parent needs relatively well.
Uninformed parents would not be served as well as informed ones, however. Those parents who care most about education would strive harder to match their children with the most appropriate schools. Of course this happens in today's educational system too. Parents who value education choose their homes based on the quality of local schools or, if they can afford to do so, send their children to superior private schools. But the inequities in the current system are no excuse for inequities in a new system.
To reduce inequities in a system of competition and choice, the government should take two measures. First, it should give schools a financial incentive to attract the children of uneducated, uninformed, and unconcerned parents. Schools that enroll students from such educationally disadvantaged families should receive additional support, perhaps $1,000 more per student. The government would need to decide what set of circumstances puts a student at an educational disadvantage, but it could use as a reasonable approximation the poverty standard it uses now for programs of compensatory education. The government could also use the money now spent at the federal and state levels for compensatory education to offer bonuses of $1,000 per student to schools enrolling the truly economically disadvantaged. These bonuses would not only encourage schools to reach out to those parents who would not make an informed choice, but would also encourage schools to take on the greater challenge of serving students who do not come to school already well prepared to learn.
The government could take one other step to reduce inequities in schools of choice. The government could take responsibility for informing parents about the choices available to them. The government could provide all parents with detailed information about school programs, orientations, faculties, and students. The government might also provide statistics on school performance such as graduation rates or test scores. Such statistics would have to be assembled with great care, however. The government could easily distort school programs by imposing narrow achievement measures that encourage schools to "teach to the tests."
As an alternative, and one that we believe would prove superior, the government could allow schools to provide whatever information they thought most useful for attracting parents, and then regulate the accuracy of the information provided. Recognizing that schools of choice would have strong incentives to communicate their virtues to prospective students and parents – and this might well include the publication of test scores and graduation rates – the government could opt to ensure "truth in advertising" rather than to provide information itself. In either case, by ensuring that parents are informed, and providing schools financial rewards for enrolling the educationally disadvantaged, the government could go a long way toward reducing inequities in a system of choice.