Does No Child Left Behind Have Teeth? Examining the Impact of Federal Accountability Sanctions in North Carolina∗

School accountability programs operate under the premise that public schools have insufficient incentives to use resources efficiently. The positive or negative sanctions incorporated into the program are intended to provide these incentives. This paper evaluates the impact of incentives associated with the Federal No Child Left Behind (NCLB) Act of 2001 on school performance in North Carolina Public Schools. The effect of threatened sanctions, or of sanctions themselves, is inferred using regression discontinuity (RD) methods. We find that the NCLB sanctions have had no significant impact on student performance in public schools. While the theoretical rationale for incentivizing schools is straightforward, previous literature has provided only a small amount of evidence that students learn more when schools are subject to incentives. There is some cross-state evidence on the impacts of state-level accountability programs (Carnoy and Loeb 2002; Hanushek and Raymond 2002), but state-level accountability initiatives may correlate with other education policies that independently influence achievement. There is also some evidence of impacts associated with programs implemented by individual states or districts (Figlio and Rouse 2006, Peterson and West 2006, Chakrabarti ∗Preliminary Draft. Please do not cite. †University of Kentucky ‡Duke University and NBER