The War on Poverty’s Human Capital Programs:

K-12 Education

Elizabeth Cascio, DartmouthSarah Reber, UCLA

Preconference PresentationNovember 18, 2011

Education and The War on Poverty

- LBJ in Special Congressional Address Jan. 12, 1965

• Exposed poverty of those with low levels of education• Proposed federal intervention in education at all levels

Elementary and Secondary Education Act of 1965

• Signed April 11, 1965

• Title I: Federal aid to fund programs for educationally deprived children– Directed to poor school districts– $1 billion in 1965-66 ($7b, 2009$)– Doubled federal aid for

elementary/secondary education

• Per-pupil grants to districts ↑ linearly in child poverty rate

OR

TN

MD

WV

CT

FL

SC

CA

NV

OK

CO

IA

WAOHDENJ

AR

ME

MO

WI

NC

ND

KSVT

LA

PA

TX

IN

SD

MT

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MAMIWY

MS

NE

MN

UT

ID

KY

RI

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100

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0 .1 .2 .3 .4 .51960 Child Poverty Rate

Figure 1. Average Title I Formula Amounts Per Pupil in 1965/66 School Yearv. 1960 State Child Poverty Rates

* Title I Formula Amounts in real 2009 dollars

What have been the effects?

• Coleman Report (1966) cast doubt on very premise– School resources explain little variation in student performance– Supported by much empirical education research post-1965

(Hanushek 1986, 1997)

• Early reports on Title I not promising– Comparisons of participants to non-participants suggested little

improvement in test scores (HEW 1967, Glass 1970)– Title I funds widely misused (Martin and McClure 1969)

Key Issues

• Selection into nominal program participation– Participants tend to be the most disadvantaged students– No experimental evaluations to date

• Title I grants were fungible– With other sources of revenue: may have displaced local or state tax

dollars ( income subsidy)– Address different educational activities: If spent on education, may

have benefited students who were not “educationally deprived”

Proposed Outline

1. Estimate direct effect of Title I on school resources using state-level data– Approach: test for change in poverty gradient of outcomes in 1965

(Cascio, Gordon, and Reber, 2011) – Outcomes: per-pupil federal revenue, per-pupil current spending,

pupil-teacher ratio, average salary of instructional staff

OR

TN

MD

WV

CT

FL

SC

CA

NV

OK

CO

IA

WAOHDENJ

AR

ME

MO

WI

NC

ND

KSVT

LA

PA

TX

IN

SD

MT

VA

NH

MAMIWY

MS

NE

MN

UT

ID

KY

RI

GA

IL

NY

AZ

NM

AL

100

200

300

400

0 .1 .2 .3 .4 .51960 Child Poverty Rate

Figure 1. Average Title I Formula Amounts Per Pupil in 1965/66 School Yearv. 1960 State Child Poverty Rates

* Title I Formula Amounts in real 2009 dollars

Slope: $787 ($44) [unweighted] $729 ($62) [weighted by

1963 enrollment]

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1952 1956 1960 1964 1968 1972year

A. Without South Indicator

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1952 1956 1960 1964 1968 1972year

B. With South Indicator

Figure 2. Year-by-Year Gradients of Per-Pupil Federal Revenuein the 1960 Child Poverty Rate

1965: $789 ($148)

1963: $129 ($61)

Difference: $660(Less than expected)

* Federal revenue in real 2009 dollars. Weighted by 1963 enrollment.

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Figure 3. Year-by-Year Gradients of Per-Pupil Current Expenditurein the 1960 Child Poverty Rate

• Estimates for 1963 and 1965 very close

• But poorer states on a different spending trajectory pre-ESEA.

• Why? Could be a region effect

* Current expenditure in real 2009 dollars. Weighted by 1963 enrollment.

Table 1. Means of State-Level School Finance and School Input Measures by Census Region for Selected Years

Child Poverty Rate, 1960

1961 1965 1969 1961 1965 1969

Title I Formula Amount (per pupil) 0 173 204 0 157 117Federal School Revenue (per pupil) 117 272 348 112 246 298Current School Expenditure (per pupil) 3,436 4,263 5,215 2,815 3,286 4,039Pupil-Teacher Ratio 24 23 21 25 24 22Average Salary of Instructional Staff 45,013 50,778 55,548 41,006 45,694 52,849Attendance Rate (%) 91 91 90 90 91 91

Child Poverty Rate, 1960

1961 1965 1969 1961 1965 1969

Title I Formula Amount (per pupil) 0 247 219 0 127 117Federal School Revenue (per pupil) 150 423 545 188 290 403Current School Expenditure (per ADA) 2,038 2,537 3,156 3,073 3,660 4,641Pupil-Teacher Ratio 27 26 24 27 25 24Average Salary of Instructional Staff 34,910 39,015 44,498 46,755 52,733 55,049Attendance Rate 89 90 89 95 95 94

0.245 0.096

Northeast Midwest

0.100 0.112

South West

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1952 1956 1960 1964 1968 1972year

A. Without South Indicator

-500

050

010

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0020

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1952 1956 1960 1964 1968 1972year

B. With South Indicator

Figure 2. Year-by-Year Gradients of Per-Pupil Federal Revenuein the 1960 Child Poverty Rate

* Federal revenue in real 2009 dollars. Weighted by 1963 enrollment.

-100

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-600

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1952 1956 1960 1964 1968 1972year

A. Without South Indicator

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1952 1956 1960 1964 1968 1972year

B. With South Indicator

Figure 3. Year-by-Year Gradients of Per-Pupil Current Expenditurein the 1960 Child Poverty Rate

* Current expenditure in real 2009 dollars. Weighted by 1963 enrollment.

Implications

• Analysis will be descriptive

• Don’t want it to be overly complex, but:– Will need to account for pre-existing trends in poverty gradients– Will need to account for region effects– Will also control for state x year policy changes that could affect

outcomes of interest (e.g., school finance equalization)

• Power may be an issue:– Final data set will use all available years of data from 1953 - 1979– Will focus on differences-in-differences models

Proposed Outline

2. Discuss indirect effect on resources via school desegregation– Title I x 1964 CRA: Cascio et al. (2010)

3. Discuss possible effects of Title I on educational attainment– Studies using state x year variation in school inputs, cohorts largely

educated prior to War on Poverty era (e.g., Card and Krueger 1992)– Studies looking at effects of school desegregation, cohorts educated

during War on Poverty era (e.g., Reber 2010, Johnson 2011)

4. Discuss Title I in modern era and related research– No Child Left Behind Act (NCLB): new conditions on Title I receipt– Title I today: complex regulatory environment reflects early failings

Bonus Slides

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1952 1956 1960 1964 1968 1972 1976 1980Year (fall of academic)

A. Without South Indicator

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1952 1956 1960 1964 1968 1972 1976 1980Year (fall of academic)

B. With South Indicator

Figure 2. Year-by-Year Gradients of Per-Pupil Federal Revenuein the 1960 Child Poverty Rate

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1952 1956 1960 1964 1968 1972 1976 1980Year (fall of academic)

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Figure 3. Year-by-Year Gradients of Per-Pupil Current Expenditurein the 1960 Child Poverty Rate

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Figure 4. Year-by-Year Gradients of Average Salary of Instructional Staffin the 1960 Child Poverty Rate

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1952 1956 1960 1964 1968 1972 1976 1980Year (fall of academic)

A. Without South Indicator

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1952 1956 1960 1964 1968 1972 1976 1980Year (fall of academic)

B. With South Indicator

Figure 5. Year-by-Year Gradients of Pupil-Teacher Ratiosin the 1960 Child Poverty Rate