The Long-Run Impacts of Special Education†

Abstract

Over 13 percent of US students participate in special education (SE) programs annually, at a cost of $40 billion. However, due to selection issues the effect of SE placements remains unclear. This paper uses administrative data from Texas to examine the long-run effect of reducing SE access. Our research design exploits variation in SE placement driven by a unique state policy that required school districts to reduce SE caseloads to 8.5 percent. This policy led to sharp reductions in SE enrollment. These reductions generated significant reductions in educational attainment, suggesting that marginal participants experience long-run benefits from SE services.