Cost Benefit Analysis of the No Child Left Behind Act of 2001 (NCLB) Presented by Surendrakumar Bagde Peter Edelman David Lee 4/28/2004

NCLB Background

We explored three aspects NCLB Background of NCLB Declining test scores Other education acts NCLB features NCLB Costs NCLB Benefits

Student Intellectual Achievement Declined in the 1970’s General Intellectual Achievement (GIA) declined in the 1970’s Source: Bishop (1989)

NCLB Established Accountability Standards that Are Expected to Enhance Student Achievement Adequate Yearly Progress (AYP) Testing States set the standards Penalties for failure to meet AYP

Congress Responded to the Decline Elementary and Secondary Education Act of 1965 (ESEA) Provided funding and assistance to K-12 schools No Child Left Behind Act of 2001 (NCLB) Maintains ESEA principles & act appropriations Establishes accountability standards

NCLB requirements have caused controversy Conflicts with state standards Forces schools to focus on testing Addresses failure through punishment instead of assistance

NCLB Costs

Costs of the NCLB Program are Hotly Debated A politically charged debate Federal vs. State and Local Supporters vs. Haters Fundamental disagreement on what the cost scope of the NCLB project should be Difference in expected States’ level in academic proficiency under IASA vs. actual proficiency

Goals of NCLB (2002~2014) 1) Meet state-set standards for subject mastery within time-frame 2) Ensure states assess student knowledge to check #1 3) Define and implement teacher quality improvement efforts to achieve #2 4) Define ways that can improve schools’ performance 5) Ensure student performance feedback to parents is effective 6) Gives freedom in allocation of funds by states to achieve all these goals

Cost Components of NCLB Accountability (AYP and Student Assessments) Annual testing of students Reading (grades 3~8) Math (grades 3~8) Science (grades 3~5, 6~9, and 10~12) English for LEP students Disability students (IDEA) Personnel Attracting hiring high-quality teachers/paraprofessionals Retention Information Management Database systems for analyzing data Reporting and monitoring School Improvement Corrective action on “delinquent” schools Student support systems to increase performance

Cost Estimates (2002~2006): NCLB incremental costs over IASA, etc. Costs for 2002~3 and 2003~4 are actual figures Costs from 2004~2008 are projections by ELC

Cost Estimates (2006~2010): NCLB incremental costs over IASA, etc. We have estimated cost projections from 2008~2014

Cost Estimates (2010~2014): NCLB incremental costs over IASA, etc.

Total Cost Estimates for NCLB Components Total 2002~2014 Accountability $ 24,770,665,570 Personnel $ 51,610,394,766 Information Management $ 924,256,120 School Improvement $ 19,839,448,838 Total $ 97,144,765,294 In 2002 Real Terms (2.45%) $ 82,066,405,788

NCLB Benefits

Pennsylvania System of School Assessment (PSSA) Determines how well children are learning at certain grade levels. Subjects are: reading, math and writing PSSA has a range of The standard deviation for 5 th grade math is 67.1, reading 5 th grade is 59.59,8 th grade math is 65.8, The mean is around 1330 Source: Davare (2004 )

Pennsylvania System of School Assessment (PSSA) By 2014 the minimum score at the proficient level has to be 1300 The new mean score will be 1450 (range has to b ) The quality improvement, taken as difference between two means, is 120 In terms of today’s standard deviation, quality improvement is 1.84*s.d. Source: Davare (2004 )

Economic Benefits of Quality Improvement Test performance have the effect on earning potential of individuals One standard deviation difference on test performance is related to 1 % difference in annual growth rates of GDP per capita An improvement of 1 s.d. would put U.S. student performance in line with that of students in a variety of high performing European countries

Quality Improvements have high pay-offs Source: Hanushek (2004)

Conclusions Present value of benefits is projected to range from $6T to $17T. Benefits far exceed costs, thus NPV is insensitive to cost levels & discount rate. Reverses the trend of U. S. students falling behind students in other countries

Bibliography: Bishop, John H. “Is the Test Score Decline Responsible for the Productivity Growth Decline?”, The American Economic Review, Vol. 79, No. 1, March 1989, p Wermers, Jason, “’No Child’ called impractical”, Richmond Times-Dispatch, RTD%2FMGArticle%2FRTD_BasicArticle&c=MGArticle&cid= February 10, 2004 Davare, Dave, director of research, Pennsylvania School Boards Association, personal communication through Robert Strauss, April 27, 2004 Hanushek, Eric A., “Some Simple Analytics of School Quality”, Working Paper 10229, National Bureau of Economic Research, January, 2004 Accountability Works, “NCLB Under a Microscope”, Education Leaders Council, January Mathis, William J., “No Child Left Behind, Costs and Benefits”, Phi Delta Kappan, Hanushek, Eric A., “The Importance of School Quality”, Education Next, Spring 2003, viewed 4/29/04