A COMPETITIVE school market is segregating students by ability, socio-economic background and ethnicity with profound effects on education outcomes, states a report by the Organisation for Economic Cooperation and Development.

The best education systems are those that combine equity with quality and give all children opportunities, argues the report, Equity and Quality in Education: Supporting Disadvantaged Students and Schools.

Too much competition... a new report says all children should have the opportunity for good education. Credit:Erin Jonasson

It precedes a major review of funding in Australia. The Gonski review will be released on February 20 and is expected to recommend an overhaul of the funding regime with particular focus on disadvantaged public schools.

The report argues investing in high quality schooling and equal opportunities from the early years to the end of upper secondary is the most profitable policy.