Financial incentives matter.
A new study by Jay P. Greene and Marcus Winters released this week by the Manhattan Institute shows that offering disabled students special education vouchers reduces the likelihood that public schools will identify students as disabled.
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. . . .
Nearly 1 in 7 students nationwide is now classified as having a disability. That’s 63% more than three decades ago. It’s clear that this huge increase in disabilities was not caused by a true increase in the incidence of disabilities in the population. No plague has afflicted our children over the last three decades to disable two-thirds more of them.
I wrote about the special education over-identification problem for Reason here.