Is Private Provision Better? Assessing Educational Outcomes at the Individual and Market level

How should the provision of education be organized, and does the type of school ownership—public, private for-profit, or private not-for-profit—matter? This paper addresses the question using 30 years of comprehensive register data from Sweden, matched with ownership information on private schools operating within the country’s publicly funded universal voucher system, to make two key contributions. First, it evaluates the individual effects of attending schools with different ownership types using a sibling comparison design. Second, it examines the market-level consequences of increased private provision by exploiting variation in private school growth across municipalities. The findings show that attending private schools—both for-profit and not-for-profit—leads to improvements in grades and test scores during compulsory education, with somewhat larger effects for for-profit schools. However, these benefits do not extend to longer-term outcomes, such as SAT scores, university attendance, or labor market incomes. At the market level, competition from private schools raises overall grades and university attendance in both public and private schools but also increases segregation, particularly between students with immigrant and non-immigrant backgrounds, while leaving education costs largely unchanged. These results are relevant as countries worldwide increasingly consider school choice and privatization policies and Sweden offers a unique context to compare ownership types while holding funding conditions constant.