Cost Benefit Analysis of the

No Child Left Behind Act of 2001

(NCLB)

Presented by
Surendrakumar Bagde
Peter Edelman
David Lee
4/28/2004
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

General
Intellectual
Achievement
(GIA)
declined in the
1970’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

2002-3 2003-4 2004-5 2005-6

Accountability $ 295,800,000 $ 295,800,000 $ 368,830,707 $ 738,804,066
Personnel $ 1,152,744,338 $ 2,553,619,930 $ 4,170,233,046 $ 4,272,403,755
Information Management $ 127,500,000 $ 63,750,000 $ 65,311,875 $ 66,912,016
School Improvement $ 388,125,000 $ 876,323,325 $ 1,409,127,907 $ 1,510,585,116
Total Each Year $ 1,964,169,338 $ 3,789,493,255 $ 6,013,503,535 $ 6,588,704,953

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

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

 We have estimated cost projections from 2008~2014

2006-7 2007-8 2008-9 2009-10

Accountability $ 756,904,767 $ 914,526,030 $ 1,000,000,000 $ 1,200,000,000
Personnel $ 4,377,077,647 $ 4,484,316,050 $ 4,600,000,000 $ 4,800,000,000
Information Management $ 68,551,360 $ 70,230,869 $ 72,000,000 $ 74,000,000
School Improvement $ 1,619,347,244 $ 1,735,940,246 $ 1,800,000,000 $ 1,900,000,000
Total Each Year $ 6,821,881,018 $ 7,205,013,195 $ 7,472,000,000 $ 7,974,000,000

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

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

2010-11 2011-12 2012-13 2013-14

Accountability $ 1,300,000,000 $ 1,400,000,000 $ 1,500,000,000 $ 15,000,000,000
Personnel $ 5,000,000,000 $ 5,200,000,000 $ 5,400,000,000 $ 5,600,000,000
Information Management $ 76,000,000 $ 78,000,000 $ 80,000,000 $ 82,000,000
School Improvement $ 2,000,000,000 $ 2,100,000,000 $ 2,200,000,000 $ 2,300,000,000
Total Each Year $ 8,376,000,000 $ 8,778,000,000 $ 9,180,000,000 $ 22,982,000,000

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

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

17704
PVB in $ 2002 billions

11803

5900

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

Quality Improvement in S.D.

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