Purpose: The purpose of this paper is to measure the efficiency performance of public sector-funded schools in Spain. Design/methodology/approach: Using school-level data from Program for International Student Assessment 2012, cross-sectional models were estimated using stochastic frontier analysis (SFA). Technical efficiencies of public sector-funded schools (public schools and centros concertados), and their determinants were estimated using a one-step maximum likelihood procedure. SFA models include both a stochastic error term and a term that can be characterized as inefficiency; the non-negative technical inefficiency effects are assumed to be a function of school characteristics. Findings: The results show that greater school autonomy and school responsibility for resource allocation are associated with efficiency improvement. Subsidized private schools (called "centros concertados") were more efficient than public schools. The former are free of bureaucratic constraints that encumber public schools, and they are able to control many more decisions at the school level (e.g. they select their own teachers). Originality/value: This paper shows the value of school autonomy for educational performance. The author defines school autonomy as the operational empowerment of the principals and teachers. Therefore, the government could grant greater autonomy to public schools (school-based management), since school autonomy is a driver of efficiency. Further, teachers' morale is also an environmental driver of efficiency. Schools tend to be more efficient when teachers work with enthusiasm or value academic achievement. And this is more likely to occur in private schools, even though teachers are hired (they are not civil servants) and have a lower salary than public school teachers. The lack of motivation of many teachers in public schools may be in the absence of incentives -- there is no possibility of promotion and everyone is guaranteed a wage increase every three years --and in the bureaucratization of the public school system.