The cost of regulation in education: do school inspections improve school quality?

Improving the quality of state-funded secondary school education has become a major policy aim in the UK. One of the means by which state-provided education in the UK is now regulated is through the system of inspections carried out by the Office of Standards in Education (Ofsted), set up in 1992. The research reported in this paper investigates, empirically, the direct effect of the Ofsted regulatory system on the observed exam performance of the secondary schools inspected. It is found that there exists a small but significant negative effect associated with the Ofsted inspection event. In any policy evaluation of the Ofsted regulatory framework, this extra cost associated with Ofsted inspections should be taken into account.