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School Choice in The Netherlands

CESifo DICE Report 2/2011
Reform Model
The Dutch education system is characterized by
school choice, made possible by public funding. Most
schools are run by private school boards,a trend that
has been increasing over the past century and a half.
Publicly-funded school choice promotes competition
between schools, resulting in efficiency as measured
by high test scores in international student achieve-
ment assessments such as PISA and TIMSS. The
country achieves high scores even after controlling
for national income and expenditure per student.
The substantial degree of competition in the system
is one determinant of its high academic achievement
rates.Thus, a large school choice system can promote
efficiency and equity without necessarily leading to
privatization or to reduced public scrutiny.
The organization of schooling
The origins of the Dutch education system can be
traced back to the 1917 “schools to the parents”
ment (James 1984; Patrinos 2002). A series of social
and political changes in the country resulted in par-
ents being able to choose whatever school they wish
for their children while the state pays most of the
cost. Article 23 of the Dutch Constitution ended the
state monopoly in education.At the time,all parts of
social life were segmented – often referred to as
“pillarization” in the literature – for a period as long
as 1870 to 1960 as part of a political compromise.
Not only were schools organized along political and
religious lines, but so too were other aspects. While
the segmentation has ended, schools continue to be
oriented in a particular way. Thus, freedom of edu-
cation was originally based on principles of freedom
of religion.
The school system combines centralized education
policy with decentralized administration and man-
agement of schools. Policy is determined centrally in
the Dutch education system, but the administration
and management of schools is decentralized to the
school level. The central government exercises ulti-
mate control over both public and private schools
and sets national standards for all schools. Never-
theless, how to teach is left up to schools to deter-
mine. In fact, school discretion is limited only by em-
ployment laws; teacher qualifications, pay and condi-
tions; and building standards. Funding mechanisms
are designed to control national expenditures. Poor
schools try to cut costs by improving efficiency, such
as using more extensive methods of teaching.
Central control is exercised over both public and pri-
vate schools. The system is characterized by a large
central staff; many school advisory services and coor-
dination bodies; a strong Education Inspectorate; and
stringent regulations.The central government, through
the Minister of Education, Culture and Science, con-
trols education by means of legislation, taking ac-
count of the provisions of the Constitution. Its prime
responsibilities with regard to education relate to the
structuring and funding of the system, the manage-
ment of public-authority institutions, inspection, ex-
aminations and student support. Control may be exer-
cised by imposing qualitative or quantitative stand-
ards relating to the educational process in schools and
attainment results, by means of arrangements for the
allocation of financial and other resources, and by im-
posing conditions to be met by schools. The central
government decides what types of school may exist;
the length of courses in each type of school; standards
for teaching staff; number of teaching periods; sal-
aries; examinations; and the norms for the establish-
ment and closure of schools.
Most schools are private, and most private schools
are managed by a religious organization, while pub-
lic schools are managed by municipal authorities.All
* Lead Education Economist World Bank. The views expressed
here are those of the author and should not be attributed to the
World Bank Group.
schools are governed by a legally recognized author-
ity (school board).The school board is responsible for
implementing legislation and regulations in schools.
There is, despite school choice and diversity
of supply,
no significant elite school sector (Karsten et al. 1995).
Primary and secondary schools receiving public
funds must be not-for-profit. Nevertheless, school
boards are able to retain surplus earnings.There are
a few for-profit schools, representing less than one
percent of total enrollments (Hirsch 2002), but they
are too small to receive government funds.
Competition and funding
Competition and equal funding are hallmarks of the
Dutch education system. Under article 23 of the Con-
stitution, all educational institutions – public and pri-
vate – are funded equally. This means that govern-
ment expenditure on public educational institutions
must be matched by expenditure on private, govern-
ment-funded educational institutions. Schools quali-
fy almost automatically for funding, provided they
meet the quality standards and funding conditions
imposed by law for the school system as a whole.
Funds are channeled from the Ministry to education-
al institutions both directly and indirectly. Schools
receive a block grant to cover their staffing costs in
addition to the block grant already allocated for run-
ning costs. As a result, school boards now receive a
single sum of money, which they are free to spend at
their own discretion, giving them more scope to
manage the school as they see fit.
There is relative ease of entry for new providers. A
small number of parents can and do start a school.
The requisite number of parents required to set up a
school varies according to population density, from
200 for small municipalities to 337 for The Hague.
The central government provides initial capital costs
and ongoing expenses, while the municipality pro-
vides buildings. Schools also receive a small fund for
operating expenses that they may allocate at their
discretion among activities such as maintenance,
cleaning, heating, libraries and teaching aids. The
sum is determined separately by each municipality,
which must then give all public and private schools
the same per capita amount.
Students and their families are entitled to choose the
school – public or private – they wish to attend. The
main impediments to choice are distance, although
parents are free to choose a school anywhere in their
city of residence or indeed anywhere in the country
since there is no catchment area. Public schools must
admit all pupils, and most pursue non-restrictive
admissions policies.A school cannot refuse to admit
a child if parents are unable or unwilling to pay.
Once it is certain that a child is to be admitted to the
school, a written contract between the school and the
parents is written and signed, stating what the par-
ental contribution is to be used for and what will
happen if it is not paid in full.
School funding is on a per capita basis. That is,
money follows students and each school receives for
each enrolled student a sum equivalent to the per
capita cost of public schooling (Patrinos 2002). The
school that receives the funds is then entitled to
funding that will cover specified amounts of teacher
salaries and other expenses.The number of teachers
to which a school is entitled depends on its number
of students. Private schools can and do supplement
this funding by charging ancillary fees; however, this
right is severely limited. There is no evidence of
refusing at-risk students (Karsten and Meijer 1999).
Municipal schools charge small fees during the
12-year compulsory stage of schooling. Schools are
fully accountable to the parents for the use of fees
collected. Moreover, parents can claim back their
child’s travel costs if there is no school (or no school
of the denomination or educational character sought
by the parents) within a radius of six kilometers
along a route considered safe and accessible to chil-
dren. Parents apply to the municipal authorities, who
draw up rules on this matter.
Other private contributions and sponsorship are
allowed, but no advertising materials are permitted,
and schools may not become dependent on sponsors
(Droog 2001; de Vijlder 2001). The central govern-
ment pays most of the running costs. Limited local
government discretion is allowed. Municipalities or
ganize and pay for minority language teaching. Sal-
aries are based on fixed scales that take into account
education and experience. While the freedom to or-
ganize teaching means that schools are free to deter-
mine how to teach, the Ministry of Education, Cul-
ture and Science does, however, impose a number of
statutory standards in relation to the quality of edu-
cation.These prescribe the subjects to be studied,the
attainment targets and the content of national exam-
inations. There are also rules about the number of
teaching periods per year, teacher training and teach-
ing qualifications, the rights of parents and pupils to
have a say in sc
hool matters, and the planning and
CESifo DICE Report 2/2011 56
Reform Model
CESifo DICE Report 2/2011
Reform Model
reporting obligations of schools. As a rule, schools
enjoy considerable freedom in the choice of text-
books and materials, and in the way they manage
their affairs. The Education Inspectorate is charged
by the Minister of Education with supervising the
manner in which schools fulfill their responsibilities.
The financing procedure is somewhat different at the
secondary level. All teacher salaries and building
costs are covered directly by the municipality. In
addition, municipal and private secondary general
schools that are included in the Minister of Edu-
cation’s three-year plan receive the same discre-
tionary fund per capita. Since 80–90 percent of all
current school expenditures are for teacher salaries,
this immediately places the bulk of budgetary deci-
sions in the hands of the central government.
Most children in the Netherlands attend private
schools (Figures 1 and 2) and the trend over the past
150 years is increasing. While 35 percent of schools
are public, 29 and 27 percent are Catholic and Pro-
testant (Hupe and Meijs 2000). There are also pri-
vate non-denominational schools that are run by an
association or foundation but are not based on any
specific religious or ideological beliefs. Like some
public schools, many privately run schools base their
teaching on specific educational principles.
Education in the Netherlands is free for the compul-
sory, first ten years of schooling. At all levels of edu-
cation, the Dutch government spends the OECD
average (OECD 2009). Education spending as a pro-
portion of GDP is 4.8 percent. Thus, achievement lev-
els are high, while relative costs are low. To deal with
disadvantage, a weighted funding formula is used. For
every ethnic minority student, a school receives 1.9
times the amount paid for other children. This is ex-
tra funding for personnel. Native children from disad-
vantaged backgrounds receive 1.25
times the amount (Ritzen et al.
1997; see Leuven et al. 2007 for an
The Netherlands scores high in
international academic achieve-
ment tests.For example, in Trends
in International Mathematics and
Science Study (TIMSS), Nether-
lands scored near the top in both
subjects in 2007, repeating its per-
formance in earlier years, such as
in 2003, 1999 and 1995.The Nether-
lands consistently scores in the top
ten in math and science. As based
on TIMSS in 2008,the Netherlands
was the second best performing
country in mathematics and sci-
ence achievement in the final years
of secondary school. In compari-
son to other countries the Nether-
lands also achieves high TIMSS
scores, even when controlling for
level of national income (as well as
expenditure per student).
In the OECD’s Programme for
nternational Student Assessment
(PISA), the Netherlands does very
well. In all three subjects, math, sci-
ence and reading
, the Netherlands
1830 1850 1870 1890 1910 1930 1950 1970 1990 2010
Public Private
Sources: James (1984); M. K. Justesen (2002); Ministry of Education.
Figure 1
1830 1850 1870 1890 1910 1930 1950 1970 1990 2010
Public Private
Sources: James (1984); M. K. Justesen (2002); Ministry of Education.
Figure 2
consistently scores above the OECD average (Ta-
ble). Research has found that confessional schools
perform better than public schools (see, for example,
Dijkstra et al. 2001). Despite the fact that there is no
elite school sector, there is some evidence of higher
quality in private schools, especially Catholic and
Protestant secondary schools (Dronkers 1995). A
careful analysis of school performance in the Nether-
lands shows that Catholic schools out-perform other
schools, especially public schools (Levin 2002). The
superior performance holds even after controlling for
educational practices and selection.
The results show
that Catholic schools perform better, when schooling
choice is available and affordable for the majority of
In the latest analysis of Dutch education performance,
Patrinos (2011) uses an instrumental variable ap-
proach. The estimate of the impact of private school
attendance is associated with higher test scores in
math, reading and science achieveme
nt equivalent to
0.19, 0.31 and 0.21 of a standard deviation, all large
and significant effects. Therefore, not only is private
school attendance contributing to achievement in
the Netherlands, but it is made possible because of
the school financing model.
There is significant freedom of education in the
Netherlands.Parents have the opportunity to choose
schools,to establish schools, to organize teaching and
to determine the principles of the
school. This has resulted in a large
number of non-public schools fi-
nanced by the state. Moreover,
parents can typically choose among
several schools. Parents have ac-
cess to a variety of schools, access
is not selective, all schools are pub-
financed and receive equal
funding, there is ease of entry for
providers into the market, and in-
formation flows. Most children in
the Netherlands attend privately-
managed schools. Private schools
are not for profit and usually man-
aged by a foundation or church.
The Netherlands shows that a
large private sector with equal
public funding does not necessar-
ily mean decentralization and a
weak central role. Choice can coexist with a strong
center. Interestingly, as the center has moved away
from any direct provision of education services its
role in policy making, evaluation and information
dissemination increased. Therefore, the fear of the
state’s retreat from matters of importance in educa-
tion policy with the introduction of market forces is
not founded.
de Vijlder, F. J. (2001), “Choice and Financing of Schools in the
Netherlands: The Art of Maintaining an Open System Responsive
to its Changing Environment”, Max Groote Expert Center,Univer-
sity of Amsterdam, mimeo.
Dijkstra, A., J. Dronkers and S. Karsten (2001), “Private Schools as
Public Provision for Education School Choice and Marketization in
the Netherlands and Elsewhere in Europe”, Occasional Paper no.
20, National Center for the Study of Privatization in Education,
Teachers College, Columbia University.
Dronkers, J. (1995), “The Existence of Parental Choice in the
Netherlands”, Educational Policy 9(3), 227–43.
Droog, M. G. A. (2001), “Information Dossier on the Structure of
the Education System in the Netherlands 2000”, Netherlands Minist
of Education, Science and Culture, EURYDICE Unit.
Hirsch, D. (2002), “School:A Choice of Directions”, OECD CERI
Working Paper: What Works in Innovation in Education.
Hupe P. L. and L. C. P. M. Meijs (2000), Hybrid Governance: The
Impact of the Nonprofit Sector in the Netherlands, Social and Cul-
tural Planning Office, The Hague.
James, E. (1984), “Benefits and Costs of Privatized Public Services:
Lessons from the Dutch Educational System”, Comparative Educa-
tion Review 28(4), 605–64.
Justesen, M. K. (2002), Learning from Europe. The Dutch and
Danish School Systems, Adam Smith Institute, London.
Karsten, S., I. Groot and M. A. Ruiz (1995),“Value Orientations of
the Dutch Educational Elite”, Comparative Education Review 39
(4), 508–21.
CESifo DICE Report 2/2011 58
Reform Model
PISA 2009 results
Math Science Reading
China 600 Shanghai-
China 575 Shanghai-
China 556
2 Singapore 562 Finland 554 Korea 539
3Hong Kong-
China 555 Hong Kong-
China 549 Finland 536
4 Korea 546 Singapore 54 2 Hong Kong-
China 533
Taipei 543 Japan 539 Singapore 526
6 Finland 541 Korea 538 Canada 524
7 Liechtenstein 536 New Zea-
land 532 New Zealand 521
8 Switzerland 534 Canada 529 Japan 520
9 Japan 529 Estonia 528 Australia 515
10 Canada 527 Australia 527 N etherlands 508
11 Netherlands 526 Ne therl ands 522 Belgium 506
Source: OEC D (2007).
CESifo DICE Report 2/2011
Reform Model
Karsten, S. and J. Meijer (1999), “School-Based Management in the
Netherlands: The Education Consequences of Lump-Sum Fund-
ing”, Educational Policy 13(3), 421–39.
Leuven, E., M. Lindahl, H. Oosterbeek and D. Webbink (2007),
“The Effect of Extra Funding for Disadvantaged Pupils on Achieve-
ment”, Review of Economics and Statistics 89(4), 721–36.
Levin, J. D. (2002), Essays in the Economics of Education,PhD
Dissertation, University of Amsterdam.
OECD (2007), PISA 2006: Science Competencies for Tomorrow’s
World, Paris.
OECD (2009), Education at a Glance, Paris.
Patrinos, H. A. (2002), “Private Education Provision and Public Fi-
nance: The Netherlands as a Possible Model”,Occasional Paper no.
59, National Center for the Study of Privatization in Education,
Teachers College, Columbia University.
Patrinos, H. A. (2011), “Private Education Provision and Public Fi-
nance: The Netherlands”, Education Economics, in press.
Ritzen, J. M. M., J. Van Dommelen and F. J. De Vijlder (1997),
“School Finance and School Choice in the Netherlands”, 16(3),
Teelken, C. (1998), “Market Mechanisms in Education: A Com-
parative Study of School Choice in the Netherlands, England and
Scotland”, Ph.D. Dissertation, University of Amsterdam.
... Learning loss was most pronounced among students from disadvantaged homes. management (30,31). The country is close to the Organization for Economic Cooperation and Development (OECD) average in school spending and reading performance, but among its top performers in math (32). ...
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