The War on Poverty’s Human Capital Programs: K-12 Education

1. The War on Poverty’s Human Capital Programs:K-12 Education Elizabeth Cascio, Dartmouth Sarah Reber, UCLA June 2012

2. Elementary and Secondary Education Act • Signed April 11, 1965 • Title I: Federal aid to fund programs for poor, educationally deprived children • Directed to poor school districts • $1 billion in 1965-66 ($7b, 2009$) • Doubled federal aid for elementary/secondary education • Per-pupil grants to districts ↑ linearly in child poverty rate

3. The Title I Program • Restricted block grant from the federal government to local school districts • Targeted good is educational services for poor children • Initially, very little regulation of use of funds • Over time, became highly regulated • Most educators now think of Title I as related to particular educational interventions (pull-out programs), schools and students • Evaluations of program consistent with this

4. Federal Grants in a Federalist System • Effects of Title I extended beyond grant-making • TI receipt initially tied to desegregation • Strengthened the hand of the Courts • Consider desegregation-related benefits part of the legacy of TI • TI receipt tied to accountability • Experience of TI influenced design of state programs

5. Title I Evaluation Studies • Federally mandated evaluations • Compare students participating in “Title I programs” to some comparison groups • Generally find Title I not so effective • Difficult to handle selection problem • Gives benefits of Title I overall only if • No Crowd-Out: Services received by treated students are new services • No Spillovers: Non-participating students not affected • Good reason to believe these don’t hold

6. Economists’ Approach • Worry about all kinds of crowd out • Who can crowd out? • State governments • Local school districts • Schools • Where might the money go? • Educational services for ineligible kids/schools • Ineligible educational expenditure (e.g. capital) • Private consumption (lower taxes) • Funds may be nominally used for intended purposes but still not increase ed services for poor children • Lots of anecdotal evidence of nominalmis-use of funds

7. Fiscal Federalism Studies • Feldstein (1978) • Gordon (2004) • Cascio, Gordon, and Reber (2012) • Range of estimates, but all find evidence of economically significant crowd-out. • What is the incidence? • CGR find suggestive evidence of improvements in ed attainment for Southern whites

8. Summary of the Literature • Important to consider crowd-out! • Few credible studies of Title I programs much less the program as a whole • Desegregation appears to have benefitted blacks  TI like played some role • Many other actors and policies also important • A lot we don’t know

9. School Spending and Attainment: A Long View • How have the relationships among educational spending, educational attainment, poverty and income changed over time? • Use state-level data from the 1950s to 2000s. • Digest of Education Statistics • Census/ACS

10. Summary • Spending incredibly unequal across states and strongly negatively correlated with poverty • No “South” effect  South is just poor • Would have needed a much larger program to equalize • Poverty less predictive and slope less steep over time • Greater role for income • Ed attainment gaps between high and low poverty states narrowing over time • HS: Strong trend over whole period • College Attendance: Consistent with role for TI