Is private schooling worth the cost?


By Leith van Onselen

As an Australian parent in 2018, the public versus private school debate is hard to avoid. With two children aged 7 and 10, and living in a fairly affluent area of Melbourne, I am continually asked “which private school will you send your kids to”? When I respond that I am planning to send my daughter to the local public schools (my autistic son goes to a special school), I am often greeted with blank stares or comments like “but don’t you want to give your child the best possible education”?

My usual response is to either ignore their comment or retort with something like: “there’s no guarantee that private schooling leads to better outcomes” or “I cannot justify the cost”.

As noted by Dr Cameron Murray way back in 2012, school choice is merely one factor determining vocational, personal and emotional skills during adolescence. Genetics, parenting, the home environment, socioeconomic status, peer groups, sports and other club activities, amongst many other factors, all contribute to shaping young minds.

Without the opportunity to conduct controlled studies, for example, by studying twins who attend different schools while holding all else constant, the best analysis of the measurable benefits of private schooling would be a statistical test of various measures of ‘success’, controlling for external factors such as parental intelligence and education, household income and location, and child’s intelligence prior to arrival at the school.


Moreover, there’s other considerations that must be considered. For example, does a public school with more diverse student backgrounds give a better social experience and equip someone better for real life? Or does a private school offer more valuable professional connections?

Actual studies comparing private and public schooling are rare, but there has been a few.

One pioneering study showed that after controlling for demographic factors public schools were in fact better at increasing grades in mathematics during primary school years than private schools.


A follow up study tracked student achievement through from kindergarten to eighth grade has this to say:

It is worth noting how little variation school type really accounts for in students’ growth in achievement.

Economists have also examined the ‘house price premium’ in catchment areas of better performing schools. A process which clearly reinforces the school performance divide through selection bias even between public schools themselves, furthering clouding the issue for researchers and parents alike.


Whereas social scientists have examined which factors lead to the choice of private schooling and, not surprisingly, found a bias towards private schooling by parents who attended private schools.

In any event, the evidence suggests academic benefits of private schools are, at best, very marginal. While at the same time, the costs of private schools are extremely high and increasing rapidly. This plays into my retort that “I cannot justify the cost”.

Back in July, University of Melbourne released the results of a study, which found no career gain from a private school education:


University of Melbourne ­researcher Jenny Chesters says parents may be wasting their money on private primary and secondary schools, judging by post-school outcomes.

“Attendance of a non-­government school was not ­associated with an increased likelihood of being employed on a full-time basis, being ­employed as a manager or ­professional or with higher earnings at age 24,” she said.

“Unless parents and governments are seeking non-monetary returns to their investments in private schooling, they may be over-investing in primary and secondary school education.”

Dr Chesters examined the salaries and jobs of more than 3800 private school students at age 24 who did year 10 in 2003.

She found the students’ achievement levels reflected the social-economic status of their parents, not the type of school they attended.

Her findings come as the fees at some top private schools edge towards $40,000 a year…

Whereas The Guardian has published a detailed report on the public vs private schooling debate, casting further doubts over whether private schooling provides value for money:

…if you’re only interested in academic achievement, the results from most of the 30-odd Australian studies since 2000 suggest that private schools are no better at progressing students’ learning than state schools, once you’ve controlled for socioeconomic background. That’s also been the case for Australia’s results in the past three Pisa tests, the OECD’s international comparison test for student learning…

“On average private schools superficially appear to achieve higher student outcomes,” concedes education researcher and public schools advocate Trevor Cobbold. “But public schools enrol the vast majority of disadvantaged students … and this is what largely accounts for differences in school outcomes.”

The Grattan Institute’s yet-to-be released study of five years of Naplan results contrasted students’ progress between Naplan tests rather than the raw scores, because it says that is the best measure of what value a school is adding. Comparing like with like schools by socioeconomic background across sectors, it found there is no significant learning advantage conferred by private schools.

Researcher Peter Goss says, “it’s a pretty clear finding that the differences in progress between the three sectors are just not there…

There is, for example, some research to suggest that public school kids do better at university than private school kids with the same Atar. The researchers say this may reflect the ability of some private schools to maximise tertiary entrance scores for their students, who revert to “underlying ability” once they’ve left…

Whatever it is, paying high fees for private school is not an economically rational decision, says Sean Leaver, a behavioural economist specialising in education choices. He compares it to a luxury consumption decision, like buying a top-end BMW over a good cheap Toyota. Both will get you there.

“As an investment? Clearly no,” he says. “There’s no real benefit from attending a private school compared to a public school once you take into account that private schools skim the best kids and screen the worst kids out.”


Call it confirmation bias, but the above reports support my view that private schooling is a waste of money.

I’ll sleep comfortable in the knowledge that I won’t be hosing tens-of-thousands of dollars down the drain each year.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.