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

Cost Benefit Analysis of the No Child Left Behind Act of 2001

(NCLB)

Presented bySurendrakumar Bagde

Peter EdelmanDavid Lee4/28/2004

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

GeneralIntellectualAchievement(GIA)declined in the1970’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

$ 6,127,229,843 $ 5,729,327,461 $ 3,698,870,918 $ 1,964,169,338 In 2002 Real Terms (2.45%)

$ 6,588,704,953 $ 6,013,503,535 $ 3,789,493,255 $ 1,964,169,338 Total Each Year

$ 1,510,585,116 $ 1,409,127,907 $ 876,323,325 $ 388,125,000 School Improvement

$ 66,912,016 $ 65,311,875 $ 63,750,000 $ 127,500,000 Information Management

$ 4,272,403,755 $ 4,170,233,046 $ 2,553,619,930 $ 1,152,744,338 Personnel

$ 738,804,066 $ 368,830,707 $ 295,800,000 $ 295,800,000 Accountability

2005-62004-52003-42002-3

$ 6,127,229,843 $ 5,729,327,461 $ 3,698,870,918 $ 1,964,169,338 In 2002 Real Terms (2.45%)

$ 6,588,704,953 $ 6,013,503,535 $ 3,789,493,255 $ 1,964,169,338 Total Each Year

$ 1,510,585,116 $ 1,409,127,907 $ 876,323,325 $ 388,125,000 School Improvement

$ 66,912,016 $ 65,311,875 $ 63,750,000 $ 127,500,000 Information Management

$ 4,272,403,755 $ 4,170,233,046 $ 2,553,619,930 $ 1,152,744,338 Personnel

$ 738,804,066 $ 368,830,707 $ 295,800,000 $ 295,800,000 Accountability

2005-62004-52003-42002-3

Cost Estimates (2006~2010):NCLB incremental costs over IASA, etc.

We have estimated cost projections from 2008~2014

$ 6,731,199,961 $ 6,461,972,222 $ 6,383,736,711 $ 6,192,361,325 In 2002 Real Terms (2.45%)

$ 7,974,000,000 $ 7,472,000,000 $ 7,205,013,195 $ 6,821,881,018 Total Each Year

$ 1,900,000,000 $ 1,800,000,000 $ 1,735,940,246 $ 1,619,347,244 School Improvement

$ 74,000,000 $ 72,000,000 $ 70,230,869 $ 68,551,360 Information Management

$ 4,800,000,000 $ 4,600,000,000 $ 4,484,316,050 $ 4,377,077,647 Personnel

$ 1,200,000,000 $ 1,000,000,000 $ 914,526,030 $ 756,904,767 Accountability

2009-102008-92007-82006-7

$ 6,731,199,961 $ 6,461,972,222 $ 6,383,736,711 $ 6,192,361,325 In 2002 Real Terms (2.45%)

$ 7,974,000,000 $ 7,472,000,000 $ 7,205,013,195 $ 6,821,881,018 Total Each Year

$ 1,900,000,000 $ 1,800,000,000 $ 1,735,940,246 $ 1,619,347,244 School Improvement

$ 74,000,000 $ 72,000,000 $ 70,230,869 $ 68,551,360 Information Management

$ 4,800,000,000 $ 4,600,000,000 $ 4,484,316,050 $ 4,377,077,647 Personnel

$ 1,200,000,000 $ 1,000,000,000 $ 914,526,030 $ 756,904,767 Accountability

2009-102008-92007-82006-7

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

$ 17,609,873,255 $ 7,206,477,812 $ 7,059,727,076 $ 6,901,459,866 In 2002 Real Terms (2.45%)

$ 22,982,000,000 $ 9,180,000,000 $ 8,778,000,000 $ 8,376,000,000 Total Each Year

$ 2,300,000,000 $ 2,200,000,000 $ 2,100,000,000 $ 2,000,000,000 School Improvement

$ 82,000,000 $ 80,000,000 $ 78,000,000 $ 76,000,000 Information Management

$ 5,600,000,000 $ 5,400,000,000 $ 5,200,000,000 $ 5,000,000,000 Personnel

$ 15,000,000,000 $ 1,500,000,000 $ 1,400,000,000 $ 1,300,000,000 Accountability

2013-142012-132011-122010-11

$ 17,609,873,255 $ 7,206,477,812 $ 7,059,727,076 $ 6,901,459,866 In 2002 Real Terms (2.45%)

$ 22,982,000,000 $ 9,180,000,000 $ 8,778,000,000 $ 8,376,000,000 Total Each Year

$ 2,300,000,000 $ 2,200,000,000 $ 2,100,000,000 $ 2,000,000,000 School Improvement

$ 82,000,000 $ 80,000,000 $ 78,000,000 $ 76,000,000 Information Management

$ 5,600,000,000 $ 5,400,000,000 $ 5,200,000,000 $ 5,000,000,000 Personnel

$ 15,000,000,000 $ 1,500,000,000 $ 1,400,000,000 $ 1,300,000,000 Accountability

2013-142012-132011-122010-11

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 800-1600 The standard deviation for 5th grade math is

67.1, reading 5th grade is 59.59,8th 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 b3 1300-1600)

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

Present Value of Benefits

5900

11803

17704

0.5 S.D. 1 S.D. 1.5 S.D.

Quality Improvement in S.D.

PV

B in

$ 2

00

2 b

illio

ns

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. 178-197

Wermers, Jason, “’No Child’ called impractical”, Richmond Times-Dispatch, http://www.timesdispatch.com/servlet/Satellite?pagename= RTD%2FMGArticle%2FRTD_BasicArticle&c=MGArticle&cid=1031773592674 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, http://www.nber.org/papers/w10229 , January, 2004

Accountability Works, “NCLB Under a Microscope”, Education Leaders Council, January 2004.

Mathis, William J., “No Child Left Behind, Costs and Benefits”, Phi Delta Kappan, www.pdkintl.org/kappan/k0305mat.htm.

Hanushek, Eric A., “The Importance of School Quality”, Education Next, Spring 2003, http://www.educationnext.org/unabridged/20032/141.pdf , viewed 4/29/04