Second, 60 percent of our private schools actually operate as for-profit companies. Some are chains, such as Kunskapsskolan, but many are smaller, local private schools. Third, the average profit margin of these schools is about 4 percent, and nearly 80 percent of the profits are reinvested in the schools.

Our system is great, I think, and has many advantages. One disadvantage, some would say, however is that the society has been more segregated. This would mainly be the reason of that the responsibility of the schools lay in the hands of the municipality, and the State has no real power over the schools as such. Because of that different municipalities have a different approach towards private and independent schools there is an inequality to the supply of private independent schools for the Swedish population. That is a big minus.

Proprietary colleges are counter-cyclical; some number of people, when they lose their job or are in danger of losing it, return to college for additional credentialing. They are doing quite well right now.

As a possibly interesting aside, the money-losing Washington Post keeps itself afloat by having bought Kaplan University as a cash cow.

Sweden has a higher minimum wage and stronger social safety net programs than, for example, the US or UK; that means that hardly any Swedish children grow up in the conditions of grinding poverty, insecurity, and stress that are routine in US inner cities.

And of course charter schools do better for this population. DC’s charter experiment was positive. Hoxby’s analysis of New York’s lottery-based charter program has shown gains for charter school students there as well. Voucher programs in Chile and Colombia seem to have been successful too (though non-profit if I remember).

It’s possible that for-profit higher ed is less promising. But keep in mind they cater to a non-traditional student body that has worse graduation rates and few alternative options.

And quite a few of them are private NON-profits. Set up at about the same time. Which means you can use them for comparison with the private FOR-profits in order to look for the differences between FOR-profit schools and NON-profit schools.

You could also make a comparison of private NON-profit schools with state (presumably non-profit) schools. This comparison might be a little iffy though, as the state schools are presumably older than the private schools, and I suspect age has advatages for a school. It gives the school time to build a reputation.

#37:
You may be quite right that for-profit won’t work, but your general argument about why this is so – encapsulated in the preceding quote – seems quite weak. The benefits of all long term investments are hard to assess in advance.

And private companies do so well in other areas that call for long-term investments: infrastructure, national parks, health care… oh wait. Two of those are almost always public and the third is in crisis in the one major country where it is run by the private sector.

Especially in higher education, most of these returns also accrue to the individual making the investment, so that there are limited externality issues.

This is completely not true. Crime is only one example of a major public externality of the outcome of education. Investing in the education of people who have no resources to invest in their own educations pays huge returns, but usually not to the investor directly. That’s why it’s a public good.

Also, there are large information asymmetry issues. The student, almost by definition, doesn’t know what he really needs to learn, and accordingly relies on the teacher to set the curriculum. There are no money-back guarantees for leaving out difficult but important subjects, so there’s nothing effectively restraining the teacher from dumbing down the curriculum to attract more students except his professional ethics (and maybe institutional reputation, which is a long-term investment the for-profit sector will generally neglect). For-profit companies are good at overruling or eliminating people’s professional ethics and replacing them with the profit motive.

If you are defining “work” = “make a profit”, you may have difficulty understanding John’s point.

And wrongly; that’s a measurement of activity, not of results.

Bingo. I can measure productivity very easily – expenses divided by students. Educational spending has been growing quite rapidly by that measure. Output improvements? Depends who asks and who they ask. Even holding aside the recent New Yorker article about the AFT and NYC public schools, big city public school systems are a business and they aren’t in the business of serving the poor.

You may be quite right that for-profit won’t work, but your general argument about why this is so – encapsulated in the preceding quote – seems quite weak. The benefits of all long term investments are hard to assess in advance. If anything, the income benefits of education are better documented and more certain than most other investments. Especially in higher education, most of these returns also accrue to the individual making the investment, so that there are limited externality issues. This is why students in the US take on large debts to get an education. If you are factually correct that for-profit providers have not done well financially, then that remains a bit of a mystery. In fact I was thinking of buying stock in some company in this sector. So at least your blog post will do some social good – by stimulating me to dig into the financials of this sector a bit more deeply.

Well, first off, thanks for taking the time to answer my question. I’m a layperson; this is not really my field, and I was having trouble figuring out what you were talking about.

Your first parenthetical clears up a lot of confusion. If you include school boards/local politicians and union officials in “the people providing/running the services,” then it makes much more sense to me. I was imagining that there was some consensus that all of those parties shared, which was extremely difficult to picture. A few follow-up thoughts on specifics:

1. Teachers spend too little time collaborating/observing one another

As a commenter above pointed out, if you say this, many people will hear it as “Teachers should work more hours.”

2. Districts (esp urban districts) manage the job application process unnecessarily badly

I doubt whether it is “unnecessarily badly” so much as it is “valuing protectionism and fear of litigation more than other possible values.” Again, I don’t doubt that you could get everyone outside the current educational system to agree that the application process is badly handled, but there is enormous investment in the status quo. My major interaction with the system has come while advocating on behalf of candidates whose credentials didn’t quite match what the state dept. of ed was expecting; it was not a reassuring experience.

3. Principals are mis-prepared; they learn how to manage budgets but learn nothing about what consitutes effective spending

My arm’s-length experience in an urban district is that principals have next to no control over their budgets. It doesn’t matter if they know how to manage a budget or gauge effective spending; they have as much real influence as a single police officer does on the city’s homicide rate.

4. In-service training is usually wasted because districts impose their own agendas, when what teachers need is collaboration time (see 1)

This reflects my observations completely. I would add that “impose their own agendas” often includes “in reaction to liability concerns,” resulting in CPR or multicultural awareness or any one of a number of moderately to extremely important—but not usually well-executed—topics.