November 29, 2021

Getting the help they need

How did cuts to special education in Texas affect the long-run outcomes for students?

A cap on special education enrollment in Texas significantly impacted student outcomes.


Nearly one in eight school children in the United States is enrolled in special education.

These additional support programs for kids with special needs cost over $40 billion per year. Despite the strain on school budgets, educators and disability rights advocates believe the programs are necessary to ensure equal educational access.

In a paper in the American Economic Journal: Economic Policy, authors Briana Ballis and Katelyn Heath investigate the long-run benefits to students enrolled in special education. The paper offers key insights for education administrators considering where best to invest their limited resources.

“This paper contributes to a broader question about what is the most effective way to allocate school resources to help at-risk groups, whether it be investing in specialized services such as special education programs or focusing on general educational improvements that affect all students in the school,” Ballis said in an interview with the AEA.

This paper contributes to a broader question about what is the most effective way to allocate school resources to help at-risk groups.

Briana Ballis

It is difficult to empirically measure how special education actually impacts student outcomes. Enrollment decisions are often subjective and left to the discretion of teachers, diagnosticians, and parents. Referrals can be inconsistent and limited by the resources available to schools and families. 

A sudden policy change in Texas presented the authors with an opportunity to address these research challenges. In 2005, Texas lawmakers set a target for school districts that effectively capped their share of special education students. Any district with more than 8.5 percent of their students enrolled in the special education programs faced state sanctions if they didn’t reduce their numbers below that threshold.

This policy—which the US Department of Education eventually deemed illegal— led to immediate declines in special education participation. The average district experienced a 4.5 percentage point drop in enrollment. But there was wide variation. Districts under the cap weren’t affected at all while others with higher student enrollment in special education had to slash programs by more than half.


Special Education Enrollment
The share of children served under the Individuals with Disabilities Education Act (IDEA) has grown significantly in the past two decades. The map below shows the percentage of children age 3 to 21 served. Hover over the map to see enrollment in each state.


 Using a “difference-in-differences” approach, the authors compared special education students before and after the policy went into effect in 2005. Then they examined whether changes in student outcomes were larger in school districts that were most affected by the cap.

They found that special education students were 13 percent more likely to be removed from programs after the policy went into effect. And the effects on their long-term educational success were significant. Students were 2.7 percent less likely to finish high school and 3.6 percent less likely to enroll in college.  

The results were largely driven by students with mild disabilities. For these students at the margin, high school completion decreased by 51.9 percentage points and college enrollment by dropped by 37.9 percentage points. 

One possible explanation for such outsized impacts on students with mild conditions is that being removed from special education programs changed their graduation requirements, removing the option to be exempt from an exit exam.  

But this alone can’t explain the impacts, Ballis said. The reductions on high school completion and college enrollment were actually largest for the special education students who would have been likely to take the exit exam anyway. The impacts may be more attributable to resource disparity between school districts.

Students in the lower-resourced school districts had the largest declines in graduation and college enrollment, which suggests that the impacts on graduation and college enrollment were more closely related to the level of investment that schools could make in programs. This speaks to the effectiveness of having robust educational support rather than simply changing graduation requirements.

The findings highlight the importance that these investments play in reducing educational inequality.

“The key takeaway here is that special education services are very beneficial for students with disabilities, even those on the margin.” Ballis said. “If we’re not going to make broader changes to general education instruction, these specialized services at the moment are really providing key benefits.”

“The Long-Run Impacts of Special Education” appears in the November 2021 issue of the American Economic Journal: Economic Policy.