The Effect of No Child Left Behind on the Percentage of Students Enrolled in Special Education Classes

I thought I'd use this post to discuss my other major research project that I have worked on throughout my college career. I also wrote this paper in my Junior year during my two semesters of econometrics. First off, it's probably good to go through a quick run down of what econometrics is. In a previous post, I said that I often refer to economics as a type of applied sociology. In a similar vein, I often describe econometrics as applied statistics. Just like any other scientists, economists attempt to answer questions using the Scientific Method. We form a hypothesis, test that hypothesis, draw conclusions, make adjustments, and repeat. Unlike most other sciences, however, it is often hard to develop controlled experiments to test economic theories. (Most people don't like it when you mess around with prices and incentives in the free market just to do some research). There is a branch of economics--experimental economics--that does just this in controlled settings, but this is a relatively small portion of the field. To get around these obstacles, economists use methods of statistics to control for observations and isolate variables in order to obtain ceteris paribus (all else equal) results. I'm actually taking a statistics class right now as part of my applied economics Masters program.

Anyway, about the research. The No Child Left Behind Act of 2001 (NCLB) was signed into law by President George W. Bush on January 8th, 2002. The purpose of this Act is "to close the achievement gap with accountability, flexibility, and choice, so that no child is left behind" (107th Congress, 2002). Part of NCLB was designed specifically with disabled students in mind. This legislation requires schools to administer state-wide standardized tests to their students in order to determine a "grade" for the school itself--to determine if each school has been accountable to its students. Each state is allowed to create its own tests, but each school must demonstrate "Adequate Yearly Progress" (AYP), else face decreased funding,  school restructuring, or mandatory school choice (I actually like the idea of school choice, but that's for another post).

The fundamental assumption of this legislation is that NCLB will force schools to increase teacher quality and accountability to students in order to achieve AYP, thereby decreasing the gap between low- and high-achieving students. As with most legislation, however, this Act creates incentives which may lead to some unintended consequences. For example, the calculus of school administrators will likely be changed by this legislation. Because schools, instead of students, bear more directly the cost of poor student achievement, school administrators are incentivized to "game the system" by placing marginally-performing students into special education classes. Although all students (including special education students) are required to take the state assessments, NCLB allows for accommodations--such as increased time--for students placed in these classes. By placing marginally performing students who would otherwise not be considered candidates for special education into these classes, the school is able to reduce the negative impact that these students will have on average regular-education scores, and perhaps boost the average scores of special education students.

Let's think of exactly why this might be. Consider a very simple example: a school with 10 students (Named A, B, C, D, E, F, G, H, I, and J...creative, huh?) taking a test, scored on a scale of 0 to 100. Further, let's say that the school is broken up into two classes: "Regular", consisting of A, B, C, D, E, F, and G; and "Special", consisting of H, I, and J. Let's say that the scores are as follows:

A: 100
B: 95
C: 90
D: 95
E: 65
F: 60
G: 55
H: 15
I: 20
J: 10

The average score of the "Regular" class is \[\frac{100+95+90+95+65+60+55}{7}=80\] The average score of the "Special" class is \[\frac{15+20+10}{3}=15\] If we just switch E, F, and G (who we might call "marginally performing students") over to the "Special" class and do nothing else, watch what happens. The new average score of the "Regular" class is \[\frac{100+95+90+95}{4}=95\] and the new average score of the "Special" class is \[\frac{65+60+55+15+20+10}{6}=37.5\] Just by regrouping the students (and without improving the quality of the teachers one bit) we have artificially raised the score of the "Regular" class by 15 points, and the score of the "Special" class by 22.5 points. Crazy, huh? Of course the overall average of the school will remain the same, but these classes would be reported separately with NCLB.

So we know that school administrators have the incentive to regroup students in these ways in order to artificially raise scores, but do they actually act on these incentives? This is where the econometrics comes in. I use a couple of different econometric models in my paper to try to answer this question. We don't have to go into the specifics of the models, but we should talk about their basic structure, and the data. My data range from 1996 to 2006, and include 20,624 school districts and all fifty states plus DC. Basically, the data can be broken up into two major time periods: preNCLB (1996 to 2000) and postNCLB (2001 to 2006). The dependent variable in all my models is %IEP, or the percentage of students (in a given school district or state) with Individualized Education Programs (IEPs) which are groups assigned to students in special education classes. My independent variables have to do with the time that an observation is taken. So the basic structure of all my models asks the question, "in a given year and in a given school district/state, what is the percentage of students in special ed?" We can track over time how this percentage changes, and discuss if it is reasonable to believe that any of that change can be attributed to NCLB.

If it is true that school administrators have acted on the incentives described above, we would expect there to be a sharp increase in the percentage of students in special education classes between the preNCLB period and the postNCLB period (around 2001). It turns out that some of my data show just that. If we regress %IEP on the individual years in my dataset, we can show how the percentage students in special education classes changes over time (with respect to my "base year" 1996). Below is a graph created from one of my regressions:

Now of course, this is not proof that school administrators are "gaming the system", but this is strong visual evidence in support of the hypothesis of my paper. Just as we move from the preNCLB period to the postNCLB period, there is a huge spike in the percentage of students enrolled in special education classes. There are a couple of other more technical tests that I run that provide me with even more evidence, but that is beyond the scope of this blog.

No Child Left Behind was designed to increase the math, reading, and writing skills of students throughout the United States, giving them greater preparation for life. The legislation is full of nothing but good intentions, but unfortunately also puts in place some perverse incentives that may have ended up hurting some students more than helping them. The legislation encourages school administrators to consider students more as "numbers" or "test scores"--assets or liabilities--than before the Act. This encourages them to decrease the "costs" imposed by these liabilities by regrouping marginally-performing students into special education classes, even though they would otherwise not have been considered in need of special education. This can hurt these marginally-performing students because they will not be in a setting appropriate to their needs, and it can also hurt students that should be in these special education classes, because some resources will be re-directed away from them, and towards these marginally-performing students.

Anyway, I hope this gave you something to think about. If you would like to see the full paper, shoot me an email at connor.cosenza@gmail.com

Have a magical day!

107^th Congress. (2002). No Child Left Behind Act of 2001. (PUBLIC LAW 107-110-JAN. 8, 2002). Washington, DC: U.S. Government Printing Office. <http://opi.mt.gov/PDF/FEDPrgms/USDOE/pl107110.pdf>.

The Opportunity Cost of Idle Time

I am a bit restless. I'm not a big fan of idle time. My family and close friends know this well. I'm not ADD, or ADHD, or anything like that. I just always have to be doing something. While trying to sleep, I'll frequently jump out of bed because a possible solution to a problem I've been working on will randomly pop into my head. While I'm sitting down drinking a beer, my mind will be racing, trying to plan out my day, prioritize the things I have to do, and figure out how I'm going to accomplish those things. Instead of listening to music while I run, I usually just let my mind wonder and try to use that time to tease out questions I've been pondering. I find it hard to just chill and zone out. I sometimes envy those that can, but I guess it's not all that bad.

This behavior is largely a result of my education in economics, which has altered my conception of time and its value. One of the most important concepts in economics is the idea of an opportunity cost. An opportunity cost, roughly defined, is the value of the next best alternative. It can take many different forms, and arise from many different situations. For an example, let's say that I am currently watching a game on TV (anyone who knows me, knows this is unlikely, but let's run with it). Further, suppose that if I had chosen not to watch the game, I would have instead gone to the theatre and seen a show (Les Misérables, perhaps?) . In this case, the opportunity cost of watching the game is the utility I would have gained had I gone to see Les Mis. Both the game and the show provide me with some degree of satisfaction, but I miss out on the satisfaction I would have obtained from watching Jean Valjean rise from beggar to bad ass because I decided to watch the game instead.

How about an example with numbers? (Feel free to skip this paragraph if you would like). What is the opportunity cost of seeking a degree at college? When you ask a question like that, you're asking, what would I be doing had I not been in college? Most people would say that they would be working. Let's say that Erin the economist is trying to decide whether or not she should go to college for another year (read: is the marginal benefit of going to college for another year greater than the marginal cost of going to college for another year?). Let's say that she currently has $10,000 stored away, and that tuition is $10,000 per year (she'll pay in cash). Also, let's say that if she decides to work, she believes that she can earn $30,000 during that time. Finally, let's say that if she does not go to college, she will put the $10,000 she has saved into a bank that earns 5.0% annually. Ok, so that's a lot of information, but let's try to figure out what the opportunity cost is of her going to college for this next year. In this example, there are actually two different opportunity costs. The first one is probably pretty obvious--it's the $30,000 she would have earned had she been working. There's one more, though. If she had not spent her money on tuition for that year, her next best alternative was putting it in a bank at 5.0% interest (I know, wishful thinking, right?). If she did this, then after the year ended, she would have $10,500 in her bank account. That extra $500 is the opportunity cost of paying tuition. Notice: this is not the cost of the tuition. This is the extra benefit she would have received had she not paid for school. So all in all, Erin's opportunity cost to going to college for another year is $30,500. I hope that made sense. Examples with numbers usually help me.

You can probably see where I'm going with this. Whenever I find that I am doing nothing, I am constantly asking myself what else I could be using my time for. How could I be spending these few minutes in a way that will give me more satisfaction? What could I be doing that is productive in some way? How can I utilize this time to best accomplish my goals? This is actually one of the major factors that lead me to start a blog. I found myself with a much lighter schedule that I am used to, and realized that I had a lot of idle time on my hands. As I talked about in my first post, there is definitely some benefit to having a blog, and each time I post, I gain a bit of additional, or "marginal" benefit. When I write down my thoughts, I consolidate what I think, and gain a better understanding of the world. Also, a lot of the jobs to which I am applying ask for a writing sample, and building up this arsenal is giving me fuel for those applications. So there is definitely some value to me in doing this. Another way to say that is that my opportunity cost of lounging around is the value I would have gained had I decided to sit at my computer and write a post.

Anyway, I hope you found that interesting. Some people say that "time is money" but you could also say that "idle time is an opportunity". It's good to know what your opportunity costs are. Take some time to think about it.

Have a magical day!

Like Clockwork: Why People Love the Efficiency of the Marketplace

This is from a talk I gave a little over a year ago at an Adam Smith Conference hosted at Mercer University.

There is a wealth of literature dedicated to the so-called “Adam Smith Problem” which postulates that the Theory of Moral Sentiments is incompatible with the Inquiry into the Nature and Causes of the Wealth of Nations because the former is based in moral sympathy while the latter is based in self-interest. I would like to dissent from this view, and provide a possible way to bridge the gap between Adam Smith’s two most famous works. In The Theory of Moral Sentiments, Adam Smith explores the strong human propensity toward perfection. This drive towards perfection is one of the strongest forces that influence man. People are fascinated with trinkets and toys that work with the highest degree of precision. They are drawn to the impeccable consistency of such devises, and often admire them as much for their perfect execution as for the small conveniences they bring to the owner. In much the same way that people are drawn to these perfectly functioning gadgets, they are drawn to the mechanisms of the marketplace. These mechanisms can help to satiate a drive which Smith speaks of in the TMS—the need for people to understand and be understood by others. This drive presents a problem when people, in general, have vastly different, often irreconcilable, methods of valuation. One way to solve this problem is to make everyone speak the same language. Money, which objectively communicates subjective value, can be this common link. Through the perfectly harmonic forces of Supply and Demand, and with the language of the Market that is the money system, complete strangers can effectively communicate their desires and work for the happiness of each other. One way that the “Adam Smith Problem” can be solved is by realizing that people admire the beauty of the marketplace because it, without the supervision of any central power, works like clockwork.

In Part IV of The Theory of Moral Sentiments, Smith highlights the kinds of perfection that people seek in their lives. According to Smith, “The utility of any object…pleases the master by perpetually suggesting to him the pleasure or conveniency which it is fitted to promote” (TMS 179). This is an important distinction that Smith makes in Part IV: what pleases the master of an object is the suggestion of conveniency—not necessarily the conveniency itself. People marvel when an object seems perfectly fitted to its intended purpose—“that this fitness, this happy contrivance of any production of art, should often be more valued, than the very end for which it was intended” (TMS 179). Smith gives various examples of this. For instance, “a watch…that falls behind above two minutes in a day, is despised by one curious in watches. He sells it perhaps for a couple of guineas, and purchases another at fifty, which will not lose above a minute in a fortnight…But the person so nice with regard to this machine, will not always be found either more scrupulously punctual than other men, or more anxiously concerned upon any other account, to know precisely what time of day it is. What interests him is not so much the attainment of this piece of knowledge, as the perfection of the machine which serves to attain it” (TMS 180).

This same concept can be illustrated in the modern era—with me as a prime example. Since for the past couple years, I have been the proud owner of an iPhone 4S. The week before I got this smart phone, I told myself that I would never need a smart phone. I had an old fashioned cell phone, and that was perfectly fine by me. I was determined to not get sucked in to the smart phone craze. The week after I got it, however, I realized that I had, in fact, been completely sucked in—I could barely live without it. I am obsessed with this little thing. It can do just about anything. I can text, send emails, surf the web, watch videos, listen to music, catch the news, and call anyone I want—and it fits in my pocket! What an amazing machine! But why this obsession? Why do I feel so desperately attached to this device of which I had no earlier need? It’s because I’m fascinated with the beauty and simplicity with which it works. It would be no great hardship to wait until I get to my laptop to check my emails (or look at funny pictures on the internet) but the idea that I can do this whenever I want is awe-inducing. With only four buttons and a touch screen, I possess all knowledge known to man.

So how does my little iPhone obsession tie into Adam Smith? For that, we must inquire into the nature and causes of the wealth of nations. In Book I of this text, Smith lays out the basic laws of Supply and Demand. The consistency with which these forces work together to place goods in their most highly valued uses is just as awe-inducing as the capabilities of my phone—and unlike my phone, the forces of the marketplace need no central human force to perpetuate itself. Instead, it is through human interaction and the efficiency of the division of labor that it is possible to create something like an iPhone at a price that people can afford. People come together from all over the world to join perfectly the pieces of the puzzle necessary to produce a phone. Highly specialized people in extremely different areas of work are required to come together in a cohesive way to make one unique product. One needs miners to obtain the metals and other raw materials, plastics makers to form the casing, and glass makers for the screen. Then one needs engineers, electricians and programmers to make the phone run. After that, one needs artists and designers to make the phone visually, and audibly pleasing. Then one must employ social scientists to run beta tests on customers to make sure it is a product that people will actually want to buy. Then, one needs a full marketing team that is able to communicate to the entire consumer base that the product is ready for sale and worth purchasing. One needs sign producers, script writers, and actors to convey this message to the public. One needs truck drivers to bring the finished phones to all the stores, and finally retail workers to go through the transaction process with me so that at last I can have the whole world in my hands. This complex, even miraculous chain of events seems impossible, but somehow, all these strangers come together perfectly, like the components of a watch, to bring me this amazing device for a couple hundred bucks.

Smith explains why societies tend to give rise to the division of labor. Different people from all over the world come together, each providing a small specialized service which highlights the special comparative advantage which that person possesses. By specializing and habituating one’s work, one can become highly efficient and differentiated from others, and therefore more highly valued. This increase in personal value incentivizes people to become even more specialized in their work to distinguish themselves as the most productive in their individualized line of work. Once people have honed these individual talents, they are able to exchange the result of their labor for a profit. The more highly specialized people are, the more productive they become, and the more they gain from their production. In this way, the tendency to become more and more efficient and productive is a self-perpetuating cycle.

Smith believes that this comes about due to a natural sociability in man. “This division of labour, from which so many advantages are derived, is not originally the effect of any human wisdom, which foresees and intends that general opulence to which it gives occasion. It is the necessary, though very slow and gradual consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter, and exchange one thing for another” (WN 25). This same propensity of man is discussed in Smith’s Theory of Moral Sentiments, although the exchange is of emotions—not goods and services. In this text, Smith highlights that “we often derive sorrow from the sorrow of others” (TMS 9), but also that “nothing pleases us more than to observe in other men a fellow-feeling with all the emotions of our own breast; nor are we ever so much shocked as by the appearance of the contrary” (TMS 13).

Although emotions are the medium of exchange in The Theory of Moral Sentiments, Smith describes a very different currency in the Wealth of Nations. The latter also describes the social nature of man from a different perspective—analyzing the transactions of goods and services rather than the transactions of emotions. Even though they may sound terribly different, they actually share great similarity. Through the mutual sympathy that exists in human nature, people desire to communicate the subjective value of experiences using emotions just as they communicate the subjective value of goods and services using money in the marketplace. When a person shows happiness or sadness, he is expressing a sense of his idea of value. When one’s sport team wins, and a person feels happiness, the shared joy of others reinforces his sense of value in that victory and elevates his joy. When a loved-one dies, and a person feels sorrow, the sympathy of others validates the value of her loss and dampens her sorrow. The transactions of goods and services in the marketplace convey very similar information. The market allows people to communicate their subjective value judgments to everyone else. With the use of money and the price system, one can instantly know what the relative value is of a certain good or service as compared to all other goods and services. When given the price of an object, one can instantly place that object within one’s frame of reference in terms that one can understand. After having been told that my iPhone cost about two hundred dollars, I could place the iPhone within my frame of reference and understand what it was worth in my own subjective terms—about 10 dinner dates with my girlfriend (let’s just say I’m thrifty!) or 20 trips to the movie theatre, or 40 runs to McDonalds, or 80 loads of laundry.

We may solve the Adam Smith Problem if we appreciate that many of the same psychological mechanisms are at work in both The Theory of Moral Sentiments and the Wealth of Nations. People have a natural tendency to seek perfection—perfection in the objects they possess, perfection in communication and social interactions, and perfection in the proper allocation of resources. Humanity has learned that in order to approach perfection, people must work together within the marketplace. In order to produce anything of value, people are highly dependent on the specialized contributions of others. All people “truck, barter, and trade” within the marketplace, allowing humanity to exploit the comparative advantages of every individual.  Just as people trade sympathies of subjective value in the emotional marketplace, they trade goods and services of subjective value in the economic marketplace. Societies use money to objectively communicate subjective value judgments. Without any central oversight, these forces of the marketplace bring mankind as close as possible to awe-inducing, perfect efficiency. Through his writings, Smith attempts to communicate that the market is a beautiful structure of spontaneous order that really does work like clockwork.

Just some thoughts. I hope you enjoyed it.

Have a magical day!