An Education Ministry study has found strong evidence school zones and school choice allow rich schools to skim the best students from schools in poor communities.
The analysis showed students who bypassed their local school to go to schools in other areas were among the most advantaged in their neighbourhoods.
It said the system appeared to be concentrating disadvantage in the schools that families were avoiding, but potentially increasing diversity in the schools that they were choosing.
The report said students who bypassed their local school had parents who earned 8-17 percent more than others in their home area and were more likely to have a Bachelor's degree.
They were also less likely to have behavioural problems, and more likely to be Pākehā or Asian.
"This is likely to substantially affect the composition of schools - the single greatest predictor of students' educational attainment is the education of their parents," the report said.
"Combined with evidence that school zones tend to be set up in a way that incorporate high SES (socio-economic status) areas and avoid low SES areas, this is strong evidence that the current combination of school choice and zones enables cream-skimming," it said.
Though out-of-zone students tended to be more advantaged than most students in the schools they bypassed, they were less advantaged than most of their peers in the schools they were going to.
"Out-of-zone students are more likely to be Māori, Pacific, or disabled, have experiences in care, less educated parents, and parents with experiences in the justice system," the report said.
The report said that could increase diversity at schools with out-of-zone students, but the trend could be distorting the accuracy of school decile numbers.
It said deciles were based on the characteristics of groups of houses, but students who moved schools were likely to have a higher socio-economic background than their neighbours.
The report said its findings supported a move to a system of allocating extra funding based on student characteristics rather than on data about their neighbourhood.
However, it said it was not clear if social segregation would decrease if the ability to choose schools was removed.
"While it is clear that school choice disproportionately serves the interests of the relatively advantaged students within each neighbourhood, it is also not clear how families might respond in an alternative without school choice."
The government's education reforms are giving the Education Ministry responsibility for setting school zones and managing out-of-zone enrolments.
Auckland Secondary Principals Association president Richard Dykes took exception to the study's use of the term "cream-skimming".
He said it suggested schools were actively recruiting the best students from poorer neighbourhoods, but the report provided no evidence of that.
Rather it showed a natural outcome of allowing families to choose a school for their child.
Dykes said overseas research also showed that richer families benefited most from school choice.
"There is a really strong case to be said if we want to improve equity then we've got to look at parental choice and school choice, but that's a very big political statement and that's not just something you turn on and off overnight."
In Auckland, Comet Education Trust chief executive Susan Warren said the study showed the movement of students was making low-decile schools less diverse.
"So you're getting schools that don't really reflect their whole communities and young people who are not having that opportunity to connect with people from different backgrounds from their own, who live right next door but don't go to school with them."
Warren said the study also showed student movment was skewing the decile system that was intended to allocate extra funding to areas of socio-economic disadvantage.
"This data shows low-decile schools are not being recognised for the level of challenge that they are facing," she said.
"Schools are going to need more funding than we had recognised."
Principals Federation president Perry Rush said one possible solution to the problem was to stop linking principals' salaries to the size of their school.
He said that would remove an incentive for principals to try to attract more students from other areas.