This isn’t what Andy Rotherham and Sara Mead expected. They claimed in a 2003 report for the Progress Policy Institute that: “special education vouchers may actually exacerbate the over-identification problem by creating a new incentive for parents to have children diagnosed with a disability in order to obtain a voucher.”
It didn’t. The reason special education vouchers restrained growth in disabilities, rather than exacerbate it, is that the vouchers check public schools’ financial incentives to identify more students as disabled. Public schools may get additional subsidies when they shift more students into special education, but if they then make students eligible for special education vouchers, they risk having those students walk out the door with all of their funding. It makes the public schools think twice before over-identifying disabilities for financial reasons.
And outside of the DC bubble, schools control the process of whether students are identified as disabled — not parents. So, if we can check the positive financial incentives that public schools have for over-identifying disabilities, we can significantly slow growth in special education.
Instead, non-medical factors have been driving special education enrollments higher. Chief among these is the financial incentives we offer schools in most states to shift more students into special education by providing additional subsidies for each student classified as disabled.
Julie Cullen of UC San Diegohas found that “fiscal incentives can explain over 35 percent of the recent growth in student disability rates in Texas.” And Sally Kwak, a student of David Card at UC Berkeley and now a professor at U of Hawaii, finds a significant slow-down in special education enrollments when California reformed its funding system.
The new study Marcus and I released today builds upon this growing research by showing yet again that public schools strongly consider non-medical factors when deciding whether to classify students as disabled. I don’t mean to suggest that all school officials are conscious of these incentives or acting with evil intention. But it is clear that the system in which they operate and their actions are shaped by these financial incentives.
If we discovered that hospitals were filling their beds with healthy people who just felt a little tired in order to obtain additional government subsidies, we would be outraged and demand dramatic reforms. Public schools are doing the same and it is time we get outraged and demand reforms.