Incentives and responses under No Child Left Behind: Credible threats and the role of competition

NCLB mandated the institution of Adequate Yearly Progress (AYP) objectives, and schools are assigned an AYP pass/fail based on performance in these objectives. AYP-fail status is associated with negative publicity and often sanctions. Using data from Wisconsin and alternate regression discontinuity designs, I study the incentives and responses of schools that failed AYP once. Math-induced AYP-failures showed strong improvements in math, while reading-induced AYP-failures showed marked improvements in reading. Consistent with incentives, these schools showed no positive effect in other high stakes objectives. In contrast, test-participation failures showed no effect in either high stakes reading or math, while they showed some evidence of positive (though not statistically significant) effects in test participation. Improvements in reading are associated with parallel effects in low stakes language arts (possibly due to spillover effects), while there is no evidence of effects in low stakes science or social studies. Nor is there evidence of effects on graduation rates. Performance in low stakes grades suffered, and so did performance in weaker subgroups in spite of their inclusion in AYP computations. There is evidence of focus on marginal students around high stakes cutoffs in subject areas AYP-failed schools improved in, but this did not come at the expense of ends. Credibility of threat mattered—AYP-failed schools that faced more competition responded considerably more strongly in the objectives they had incentives in.