Financing special education: Spending, incentives, and cross-subsidization in Michigan's public and charter schools

This dissertation consists of three papers that explore the special education financing system in Michigan. I find inequities in the system that arise from the relatively low level of state reimbursement for special education and the dependence of the system on property tax revenues. Special needs students in the property poor areas of the state are disadvantaged in terms of spending per pupil, cross-subsidization, and possibly in their identification as eligible for an IEP. One conclusion shared by all the papers in the series is the observation that the composition of special education students varies across school districts and charter schools, making it difficult to determine the extent to which financial incentives and the composition of students each contribute to the differences in the delivery of special education. Further study using student level data and observing students over time could provide credible estimates of the incentive and compositional effects.