Rising school fees: which claim is correct?

The cost of sending a child to a senior independent school has soared from around £6,000 to almost £30,000 in 25 years, it was disclosed.

In the last six years alone, fees have increased by around a third at some schools, figures show, quicker than the rise in earnings.

OK, but perhaps these peeps are right?

But independent school leaders insisted the figures were \”highly misleading\” and rises were in line with an increase in general education costs, including teachers’ salaries, pensions and the price of building work.

The way to sort out such counterclaims is to go and look at the different inflation rates: of prices in general and of wages. Which you can do here.

£6,000 in 1984 (used because 2010 isn\’t in the database yet, but I still want to get 25 years in) is in 2009 £14,400 using the retail price index. But the general inflation rate isn\’t quite right for a labour heavy service like education, as William Baumol tells us. So, upgrading by average wages gives us £23,300 instead.

So, at £30,000, yes school fees do seem to have risen substantially faster than teahers alaries etc would seem to indicate.

Yet the schools don\’t make profits, so that extra money must be going somewhere. I would suggest (suggest only, I don\’t actually know) that there are two things here.

1) That wages rise is the average wage rise. And as we know there\’s been an increase in the gap between average and higher paid workers over the past generation. Could be that private school teachers have been on the, for them, right side of that change. I think I\’m right in saying that State school teachers have had higher than average wage gains over that time and they are the competition after all. So there\’s been some specific, as well as the general, wage inflation for schools over that time.

2) I\’m told that the private schools have \”got better\” over that time as well. \”Got better\” in the sense of having smaller class sizes (thus requiring more of that more highly paid labour per pupil) as well as generally better living conditions and food etc.

Quite how much of the price rise you want to ascribe to each is up to you. Well, in the absence of someone doing some real research that is. Price rises on inputs or the use of more inputs?

6 comments on “Rising school fees: which claim is correct?

  1. “a senior independent school”: what on earth is meant by ‘senior’? What presumably is meant, judging by those fees, is “boarding”. But none of the best independent schools nowadays (except Eton and Winchester perhaps) are principally boarding schools, are they?

  2. I think that must be for boarding, as I’m sure my parents weren’t paying £6K for me as a day boy on the 1980s. More like £1500/term.

    There’s a lot less boarding nowadays, and the schools that still offer it will have considerably higher costs for that than existed 25 years ago. The cost of providing individual rooms for example, instead of communal dorms, massively increased H&S requirements, plus as boarding numbers decrease you are covering your fixed costs with fewer pupils.

    I would be interested to see the same figures for day pupils, as I suspect they would show lesser growth due to increased competition for places (lots of schools now take day pupils that would have been 100% boarding 25 years ago), and its more of a pure ‘cost of hiring teachers’ play.

  3. I think you have to be a bit careful with these inflation comparisions. Although it helps explain the cost rises, it doesn’t make them any less expensive, or if it does, it means that real incomes haven’t risen (of course for some people, such as in the City they still will have done so, but that will mean others will have not done so).

  4. Could it be a simple supply an demand scenario?

    The number of parents who want to send their kids to private schools has increased. The number of schools has not increased accordingly.

  5. The point of private schools is probably not to provide a better education, but to provide an education with a lot of other rich kids. There’s been quite a few studies done comparing educational outcomes, and the results are all over the place.
    See for example http://www.allacademic.com/meta/p_mla_apa_research_citation/1/0/8/4/7/p108479_index.html
    http://edinburghnews.scotsman.com/privateeducation/Private-schoolsare-they-worth-it.2370284.jp

    http://epa.sagepub.com/content/18/1/1.abstract
    http://econpapers.repec.org/paper/wopwispod/1141-97.htm

    http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VFD-4C8PDW3-3&_user=10&_coverDate=08/31/2004&_rdoc=1&_fmt=high&_orig=search&_origin=search&_sort=d&_docanchor=&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=bf5d985d53cab6bc2790b6b861b6c30d&searchtype=a

    Private schools also provide the nice benefit of being able to signal how much money you are earning, like driving a Porsche but in a way that makes you look devoted to your children and to education.

    As top incomes rise, the cost of the private school can rise with it, indeed has to to maintain the point of “sending your kids to school with lots of other rich kids”.

    This doesn’t have to show up in profits, people employed by the school can take nicer working conditions, or, as you say, nicer facilities.

  6. When I left in 1988 my place was charging around the 14K/year mark for boarders, if memory serves. Now it’s more like 28K. Looks broadly consistent with your sums. Facilities have undergone a radical transformation: had I enjoyed accommodation like that in my first few years of gainful employment I would have counted myself lucky, but in this day and age it is hard to argue that for the outlay of $50,000 a year one’s offspring should have to sleep in a barracks.

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