There have been numerous evaluations of the effectiveness of Title I, but many suffer from potential biases due to the possibility of unobserved differences between Title I and comparison schools. This paper improves on these earlier studies first by examining the impact of Title I eligibility on school spending. We then estimate the impact of Title I eligibility on state compensatory education funds in order to identify any crowding out. Next, we turn to effects on outputs. We use a regression discontinuity design (RD), a school fixed effect specification and perform separate analyses for elementary/middle and high schools in New York City (NYC). This design provides credible estimates of the effect of Title I eligibility on both spending and outcomes.
Being the largest federal compensatory aid program to education, Title I’s effectiveness largely determines the success of federal spending in improving learning outcomes for poor children. Additionally, most states also use compensatory aid programs to target additional resources to schools and districts with low achieving and/or high poverty children, and, like Title I, few detailed programmatic or curricular specifications are attached. Thus, analyses of Title I offer insights into a large range of compensatory spending programs. Finally, understanding the effect of Title I funding on student performance sheds light on the possible impacts of new district finance proposals such as “Weighted Student Funding (WSF).” As is the case for Title I, with WSF schools receive money based on the characteristics of the students at each school, rather than on the number of teacher positions, as was the historical way of distributing most intra-district funding. Therefore, credible evidence on the effect of Title I on school performance will prove useful to both federal and state policymakers and provide evidence relevant to changes in how schools are funded.