An Integrated Assessment of the Effects of Title I on School Behavior, Resources, and Student Achievement

Abstract

Title I has been the largest Federal government program targeted towards elementary and secondary education for the past 40 years, yet there is still no consensus on whether it works. Building on the work of van der Klaauw (2008) and Gordon (2004), we examine the effects of Title I on school behavior, resources, and academic performance using a rich set of school finance and student-level achievement data from one large urban school district. The results of our regression discontinuity analysis suggest that Title I eligibility raises Federal revenues of schools near the poverty eligibility cutoff by about $460 per student. This increase appears to be partially offset by decreases in revenues from state categorical aid grants, so that the net increase to schools is probably about $360 per student. Given the high variation in per pupil expenditures among even very similar schools, however, Title I eligibility results in no noticeable increase in total direct expenditures. We also find that Title I appears to have no impact on overall school-level test scores, and suggest that this is unsurprising given the small amounts of money involved. Even among the subgroups of students most likely to be affected by Title I, however, there appear to be no returns to Federal funding in terms of higher achievement measured on end of year exams. A novel finding is that schools appear to respond to the incentives embedded in the Title I allocation process by manipulating the fraction of their students signed up for free lunch to secure more Federal funds.

Keywords: Title I, Compensatory Funding, Economics of Education, Regression Discontinuity

JEL Classification: I2, I22