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Funding Special Education by Capitation: Evidence from State Finance Reforms

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  • Elizabeth Dhuey

    ()
    (Center for Industrial Relations and Human Resources, University of Toronto)

  • Stephen Lipscomb

    ()
    (Mathematica Policy Research, Inc., Cambridge, MA)

Abstract

This study examines responses to state capitation policies for special education finance between 1991–92 and 2003–4. Capitation refers to distributing funds based on the entire student enrollment. We find that disability rates tended to fall following capitation reforms, primarily in subjectively diagnosed categories and in early and late grades. The association appears immediately in less severe categories but gradually in severe categories. More frequent program exiting partly accounts for falling disability rates among high school students. Capitation also is associated with a rising local share and a falling state share of funding. The evidence supports an increased use of outside school placements among severe disabilities, consistent with an incentive-based response. We find weaker evidence of a relationship between capitation and higher request rates for dispute resolution. Finally, we present evidence of differential effects based on both the pre-reform funding system and the presumed strength of the policy change. © 2011 Association for Education Finance and Policy

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Bibliographic Info

Article provided by MIT Press in its journal Education Finance and Policy.

Volume (Year): 6 (2011)
Issue (Month): 2 (April)
Pages: 168-201

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Handle: RePEc:tpr:edfpol:v:6:y:2011:i:2:p:168-201

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Keywords: special education; capitation; state finance reform; disability rates;

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Cited by:
  1. Deuchert, Eva & Kauer, Lukas & Liebert, Helge & Wuppermann, Carl, 2013. "No disabled student left behind? - Evidence from a social field experiment," Economics Working Paper Series, University of St. Gallen, School of Economics and Political Science 1336, University of St. Gallen, School of Economics and Political Science.

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