PRELIMINARY AND INCOMPLETE: Please do not cite without permission Draft: 11/09/04 School Accountability and the Distribution of Student Achievement

This paper examines whether minimum competency school accountability systems, such as those created under No Child Left Behind, influence the distribution of student achievement. Because school ratings in these systems only incorporate students’ test scores via pass rates, this type of system increases incentives for schools to improve the performance of students who are on the margin of passing but does not increase short-run incentives for schools to improve other students’ performance. Using student-level, panel data from Texas during the 1990’s, I explicitly calculate schools’ short-run incentives to improve various students’ expected performance, and I find that schools do respond to these incentives. Students perform slightly better than expected when their test score is particularly important for their schools’ accountability rating. Also, students perform substantially better than expected when many of their classmates’ scores are important for the schools’ rating, and this is especially true for the lowest achieving students. This suggests that the distributional effects are more closely related to broad changes in instruction or resources than related to narrowly tailored attempts to improve the performance of specific students. If one of the primary goals is to create a sort of educational triage, in which students moderately below minimum grade-level skills are pushed up, then the No Child Left Behind type of rating system appears to be fairly effective. However, if accountability systems are not intended to induce schools to shift resources disproportionately towards certain types of students, then these systems should use test results to formulate school ratings that do not simply reflect the fraction of students achieving minimum competency. “Under the [No Child Left Behind] law, schools must test students annually in reading and math from third grade to eighth grade, and once in high school. Schools receiving federal antipoverty money must show that more students each year are passing standardized tests or face expensive and progressively more severe consequences. As long as students pass the exams, the federal law offers no rewards for raising the scores of high achievers, or punishment if their progress lags.” (Schemo, New York Times, A1, March 2, 2004).