This dissertation is separated into three independent chapters. The first chapter examines the effect of federal regulations at reducing racial disproportionality in special education identification. Since the 1960s, educators and policymakers have been concerned with the overrepresentation of Black students in special education compared to their White counterparts. In 2004, Congress reauthorized the Individuals with Disabilities Education Act (IDEA) and included in it financial incentives for school districts to reduce their level of racial disproportionality in special education programs. This chapter presents evidence of the effect of the penalties on the Black-White gap in special education representation in Michigan. Using a difference-in-differences approach, I exploit the variation by race in the marginal cost of an additional special education student for districts close to the policy threshold. The results indicate that the IDEA policy change induced sanctioned districts to lower their relative disproportionality measure by 41 percent, which was achieved by reducing the proportion of all Black students receiving special education services. The second chapter further investigates disparities in special education placement across multiple dimensions. Factors leading to the placement of students into special education programs have become a central discussion point in special education policy over the past decade. This essay examines the roles that race and socio-economic status play on special education identification. Using data describing Michigan school districts between 2002 and 2010, this chapter analyzes several features of special education: placement, amount of services provided, and type of disabilities identified. I find evidence that socio-economic status and relative race influence participation rates.The third and final chapter explores the role of reduced class size on special education placement. In the 1980s, Tennessee implemented the Project STAR experiment, which randomly assigned elementary-school students to different sized classrooms from kindergarten through third grade. Using this randomization of students to classrooms, I estimate that reduced class size net of its effect on test scores increased special education participation by 2.8 percentage points. Evidence of increased special education identification supports the hypothesis that smaller class sizes lead to increased teacher understanding of students' needs for services.
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