Parents and their children often choose private instead of public schools. The former have proven that they are as effective as public schools while their costs are lower than those of public schools. However, private schools are often considered to be “rich people’s schools” because the parents have to pay a tuition. An analysis by the IW shows, however, that private schools are forced to do so due to an unreasonable discrimination by public authorities. Though private schools are entitled to grants their amount is lower than state expenditure for public schools. In addition, the cost calculation used by the states does not take into account all costs of running a public school. As a result of this twofold discrimination, the states waste the opportunity to exploit efficiency effects that could arise if private and public schools competed on a level field.

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