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The Impact of Fiscal Incentives on Student Disability Rates

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Author Info
Julie Berry Cullen

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Abstract

Student disability rates have grown by over 50 percent over the past two decades and are continuing to rise. Policy discussion has linked this trend to state funding formulas that reward local school districts for identifying additional students with special needs. However, there is little empirical evidence on the role of these fiscal parameters in explaining student disability rates, or, more generally, on the responsiveness of local program take-up rates to intergovernmental fiscal incentives. In order to estimate the elasticity of student disability rates with respect to the generosity of state reimbursements, I use variation in the state aid generated by serving a disabled student across local school districts in Texas from 1991-92 through 1996-97. The take-up response is identified from sharp changes in the relative treatment of districts of differing wealth that arise from court-mandated changes in the structure of school finance equalization. My central estimates imply that fiscal incentives can explain over 35 percent of the recent growth in student disability rates in Texas. The magnitude of the institutional response varies by district size and enrollment concentration, student race/ethnicity composition, and the level of fiscal constraint.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7173.

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Date of creation: Jun 1999
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Handle: RePEc:nbr:nberwo:7173

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H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  4. Courty, Pascal & Marschke, Gerald, 1997. "Measuring Government Performance: Lessons from a Federal Job-Training Program," American Economic Review, American Economic Association, vol. 87(2), pages 383-88, May. [Downloadable!] (restricted)
  5. Anderson, Patricia M & Meyer, Bruce D, 1997. "Unemployment Insurance Takeup Rates and the After-Tax Value of Benefits," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 913-37, August.
  6. Alan B. Krueger, 1990. "Incentive Effects of Workers' Compensation Insurance," NBER Working Papers 3089, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Chaikind, Stephen & Corman, Hope, 1991. "The impact of low birthweight on special education costs," Journal of Health Economics, Elsevier, vol. 10(3), pages 291-311, October. [Downloadable!] (restricted)
  8. Heckman, James J & Heinrich, Carolyn & Smith, Jeffrey, 1997. "Assessing the Performance of Performance Standards in Public Bureaucracies," American Economic Review, American Economic Association, vol. 87(2), pages 389-95, May. [Downloadable!] (restricted)
  9. Bound, John & Waidmann, Timothy, 1992. "Disability Transfers, Self-Reported Health, and the Labor Force Attachment of Older Men: Evidence from the Historical Record," The Quarterly Journal of Economics, MIT Press, vol. 107(4), pages 1393-419, November. [Downloadable!] (restricted)
  10. Eric A. Hanushek & John F. Kain & Steven G. Rivkin, 1998. "Does Special Education Raise Academic Achievement for Students with Disabilities?," NBER Working Papers 6690, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. James J. Heckman & Jeffrey A. Smith & Christopher Taber, 1996. "What Do Bureaucrats Do? The Effects of Performance Standards and Bureaucratic Preferences on Acceptance into the JTPA Program," NBER Working Papers 5535, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Robin L. Lumsdaine & David A. Wise, 1994. "Aging and Labor Force Participation: A Review of Trends and Explanations," NBER Chapters, in: Aging in the United States and Japan: Economic Trends, pages 7-42 National Bureau of Economic Research, Inc. [Downloadable!]
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  13. Bassi, Laurie J, 1988. "Poverty among Women and Children: What Accounts for the Change?," American Economic Review, American Economic Association, vol. 78(2), pages 91-95, May. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Byron F. Lutz, 2006. "Taxation with representation: intergovernmental grants in a plebiscite democracy," Finance and Economics Discussion Series 2006-06, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  2. Perry Singleton, 2008. "The Effect of Disability Insurance on Health Investment: Evidence from the VA Disability Compensation Program," Center for Policy Research Working Papers 105, Center for Policy Research, Maxwell School, Syracuse University.
  3. Julie Berry Cullen & Randall Reback, 2006. "Tinkering Toward Accolades: School Gaming Under a Performance Accountability System," NBER Working Papers 12286, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Johansson, Per & Skedinger, Per, 2005. "Are Objective, Official Measures of Disability Reliable?," Working Paper Series 643, Research Institute of Industrial Economics. [Downloadable!]
    Other versions:
  5. Rajashri Chakrabarti, 2005. "Vouchers, Public School Response and the Role of Incentives: Evidence from Florida," Public Economics 0512002, EconWPA. [Downloadable!]
    Other versions:
  6. Kathryn Wilson & Kristina Lambright & Timothy M. Smeeding, 2004. "School Finance, Equivalent Educational Expenditure, and Income Distribution: Equal Dollars or Equal Chances for Success?," Center for Policy Research Working Papers 62, Center for Policy Research, Maxwell School, Syracuse University. [Downloadable!]
  7. repec:bep:eapadv:v:4:y:2004:i:1:p:1311-1311 is not listed on IDEAS
  8. David N. Figlio & Lawrence S. Getzler, 2002. "Accountability , Ability and Disability: Gaming the System," NBER Working Papers 9307, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Caroline M. Hoxby & Ilyana Kuziemko, 2004. "Robin Hood and His Not-So-Merry Plan: Capitalization and the Self-Destruction of Texas' School Finance Equalization Plan," NBER Working Papers 10722, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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