A study has found no significant differences in secondary school performance across different deciles.
Analysis of 400,000 students' results found outcomes actually depend on the student's economic situation at home - not the decile of their school.
NZ Initiative executive director Dr Oliver Hartwich says it changes everything we thought we knew.
"All the talk that we've had in the last few years about a systemic crisis at the bottom of our education system in the lower deciles is simply not true."
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Dr Hartwich says it challenges the validity of the Government's Tomorrow's Schools review, which has suggested taking power away from boards of trustees and handing it to education 'hubs' that would each handle around 120 schools.
Presently schools are ranked between decile 1 and 10 - decile 1 schools draw students from lower socio-economic areas, and 10 the highest. The lower a school's decile, the more funding it gets "to help them overcome any barriers to learning that students from lower socio-economic communities might face", according to the Ministry of Education.
The research shows that while lower-decile schools were less likely to produce students that achieve University Entrance, and high-decile schools more likely, once the students' their socio-economic status was taken into account, the line was largely flat.
And the NZ Initiative's research appears to show the decile system is largely working as intended.
"Their starting assertion for the report was that we have systemic differences between schools across different deciles," says Dr Hartwich. "In fact, the differences disappear the moment you account for background differences."
According to the study, "adjusted for the different student populations they serve, the vast majority of New Zealand's secondary schools create the education outcomes we would expect from them".
"Crucially, the Initiative's findings provide hard evidence that decile is not a proxy for school quality."
In other words, a child from a privileged background is more likely to succeed no matter what school they go to - and the reverse is true for children from disadvantaged backgrounds.
Taskforce says caution needed on figures
Chair of the Tomorrow's Schools Independent Taskforce Bill Haque told Newshub while the study "may well provide some useful information", it needed to be "treated with considerate caution" as NCEA pass rates are a "very flexible measure" of education outcomes.
"The taskforce is not clear about what academic data is collected about students on entry to secondary schools and the extent to which it can be linked with NCEA data to justify any claim to calculate value add," said Haque.
"However, it is hardly a surprise that socio-economic factors are a prime determinant of student outcomes. This is well-known and has been for decades, and is a major cause of the large (by OECD standards) equity issues we face in this country."
He said the study shows the decile system is failing to mitigate socio-economic factors, with kids at schools in poorer areas still failing to succeed at the same rates as their advantaged peers.
"If we are to address these issues all schools from across the whole decile range will need to do better. This is a huge and significant challenge. It will require better professional support for teachers, leadership support for principals and boards, wrap around student support services and, of course, more resourcing.
"The taskforce has been at pains to point out that decile is not a proxy for quality and is a poor indicator of disadvantage in schools. The taskforce has recommended that the decile system needs to be removed - and replaced with a new Equity Index - because it unfairly labels schools and because it does not do what it is meant to do."
The equity index would anonymously attach funding to each student, depending on their level of disadvantage, rather than have funding based on the socio-economics of the area it pulls students from.