Three Essays on the Economics of Special Education
Heath, Katelyn Michelle
Over 13 percent of U.S. public school students participate in special education programs annually, at a cost of roughly $40 billion. However, the causal impacts of special education services remains unclear. In Chapter 1, which is coauthored with Briana Ballis, we use administrative data from Texas to produce the first causal estimates of the long-run effects of losing access to special education. Our research design exploits variation in special education placement driven by a policy change in Texas that required school districts to reduce special education enrollment to 8.5 percent. We show that this policy led to sharp reductions in special education participation. Our difference-in-differences estimates imply that special education students enrolled in the average district experienced a 12 percent increase in the likelihood of special education removal, a 2.6 percent decrease in the likelihood of high school completion, and a 3.7 percent decrease in the likelihood of college enrollment. For students on the margin of special education placement decisions, our instrumental variables estimates imply that special education removal decreases high school completion by 52.2 percentage points and college enrollment by 37.8 percentage points. Lower-income and minority students experience larger increases in special education removal, and the negative impacts of special education removal on educational attainment are concentrated among these students. These results suggest that marginal participants experience long-run benefits from special education services. In chapter 2, also co-authored with Briana Ballis, we provide the first causal estimates of the long-run impacts of limiting minority student access to special education, as well as the first causal spillover effects of limiting access to special education on general education students. Under the same policy change that was utilized in Chapter 1, Texas capped district-level black and Hispanic disproportionality, defined as the percent of black or Hispanic students in special education relative to the percent in a district overall. We employ a dose-response difference-in-differences estimation strategy with administrative data from Texas. We find that the black disproportionality cap led to small gains in high school completion and college attainment for black students in special and general education. In contrast, the cap on special education enrollment led to reductions in high school and college completion for black and Hispanic students in special and general education. We provide suggestive evidence that these heterogeneous treatment effects could be driven by unobserved differences in special education misclassification. In Chapter 3, I explore the impacts of state special education funding formulas on special education funding, enrollment, and overall student performance. In 2008, New Jersey overhauled its state finance system for funding public school districts. This included changing the way special education funds are distributed across districts, from a census to a block grant system. Prior to 2008, categorical aid was given to local school districts for each additional student classified as special education. After the policy change, New Jersey implemented a block grant formula that gives each district an amount of money based on the total district enrollment and the statewide average special education classification rate. I implement a difference-in-differences specification that exploits variation in treatment intensity across districts based on their pre-policy special education rates to estimate the impacts of this funding change on special education funding per pupil, special education enrollment, and overall student achievement. I find that the policy reduced district-level special education funding per pupil (both special and general education pupils) by about 4%, reduced total special education funding by about 7%, and reduced special education enrollment by about 1.2%. However, I do not find economically meaningful impacts of the funding change on special and general education performance on math or reading exams, or on the proportion of students who drop out of high school.
difference-in-differences; disability; Special Education
Lovenheim, Michael; Miller, Douglas
Ph. D., Economics
Doctor of Philosophy
dissertation or thesis