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

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

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

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

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

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 nominal mis-use of funds

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

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

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

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