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Funding Special Education by Capitation: Evidence from State Finance Reforms

Author

Listed:
  • Elizabeth Dhuey

    (Center for Industrial Relations and Human Resources, University of Toronto)

  • Stephen Lipscomb

    (Mathematica Policy Research, Inc., Cambridge, MA)

Abstract

This study examines responses to state capitation policies for special education finance between 1991–92 and 2003–4. Capitation refers to distributing funds based on the entire student enrollment. We find that disability rates tended to fall following capitation reforms, primarily in subjectively diagnosed categories and in early and late grades. The association appears immediately in less severe categories but gradually in severe categories. More frequent program exiting partly accounts for falling disability rates among high school students. Capitation also is associated with a rising local share and a falling state share of funding. The evidence supports an increased use of outside school placements among severe disabilities, consistent with an incentive-based response. We find weaker evidence of a relationship between capitation and higher request rates for dispute resolution. Finally, we present evidence of differential effects based on both the pre-reform funding system and the presumed strength of the policy change. © 2011 Association for Education Finance and Policy

Suggested Citation

  • Elizabeth Dhuey & Stephen Lipscomb, 2011. "Funding Special Education by Capitation: Evidence from State Finance Reforms," Education Finance and Policy, MIT Press, vol. 6(2), pages 168-201, April.
    • Handle: RePEc:tpr:edfpol:v:6:y:2011:i:2:p:168-201
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    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/EDFP_a_00031
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    Cited by:

    1. Dhuey, Elizabeth & Lipscomb, Stephen, 2010. "Disabled or young? Relative age and special education diagnoses in schools," Economics of Education Review, Elsevier, vol. 29(5), pages 857-872, October.
    2. Eva Deuchert & Lukas Kauer & Helge Liebert & Carl Wuppermann, 2017. "Disability discrimination in higher education: analyzing the quality of counseling services," Education Economics, Taylor & Francis Journals, vol. 25(6), pages 543-553, November.
    3. Elizabeth Dhuey & Stephen Lipscomb, 2013. "Funding Special Education by Total District Enrollment: Advantages, Disadvantages, and Policy Considerations," Education Finance and Policy, MIT Press, vol. 8(3), pages 316-331, July.
    4. Deuchert, Eva & Kauer, Lukas & Liebert, Helge & Wuppermann, Carl, 2013. "No disabled student left behind? - Evidence from a social field experiment," Economics Working Paper Series 1336, University of St. Gallen, School of Economics and Political Science.

    More about this item

    Keywords

    special education; capitation; state finance reform; disability rates;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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