Average Daily Membership Versus Average Daily Attendance: More Information Is Needed
Good evening Chairman Gardner and members of the Senate Education Committee. Thank you for the opportunity to speak to you about the education portion of Substitute House Bill 95. My name is Joshua Hall and I am Director of Research at the Buckeye Institute for Public Policy Solutions. In addition, I oversee the Institute’s education center, the Center for Education Excellence.
The Buckeye Institute is a public policy research and education institute with the mission to provide Ohio’s leaders and citizens with new ways of thinking about problems facing our state and local communities. Among the Buckeye Institute’s core values are a commitment to serious empirical research and policy analysis. My comments today are made with that core value in mind.
My academic background is in economics and I teach economics as an adjunct professor at Capital University here in Columbus. One of the first things I teach my students is that incentives matter. A popular textbook goes so far as to call this statement the basic postulate of economics.[1]
This postulate means that making an activity more attractive, financially or otherwise, will entice more people to engage in that activity. Conversely, making an activity less attractive, financially or otherwise, will mean fewer people will engage in it.
This postulate certainly holds true for education. Consider the recent research by Manhattan Institute scholar Jay Greene. Dr. Greene looked at the special education enrollment during the 1990s. During that time, 33 states and the District of Columbia had “bounty” funding systems. The “bounty” system gave schools a financial incentive to enroll children in special education.
Over the same time period, 16 states had a “lump sum” payment system.[2] This type of system created no financial incentives to increase special education enrollment. Dr. Greene, controlling for other factors between the states, found that “bounty” funding increased special education enrollment by 1.24 percent over the decade. This translated into 390,000 extra special education students and over $1.5 billion in additional spending.[3]
So it is clear that it is possible for schools to respond to financial incentives. What implications then, does the postulate that incentives matter imply in the context of Substitute House Bill 95? Specifically, I will be talking about the proposed change from Average Daily Membership (ADM) method of counting students to the Average Daily Attendance (ADA) method.
Good attendance is one of the most important factors in school performance. A 1998 study by the Buckeye Institute found that student attendance was the only school-related variable to consistently be correlated with student performance on proficiency exams.[4] Increasing student attendance is therefore a good way to increase learning in Ohio’s schools.
So both common sense and research tell us that improving attendance is correlated with increased student learning. In making good public policy, however, that is only half of the equation. The second, and more difficult, question is: how do we create the right incentives to increase attendance?
At the extreme, for example, it could be made a felony to not have your children in school unless hospitalized. Such a policy, while creating the right incentives, certainly violates common sense and the principle that the punishment should fit the crime. In addition, proposals that tell parents what to do regarding their children’s education, even if correct, tend to not be viewed favorably.
The proposal to shift from an Average Daily Membership (ADM) method of counting students to an Average Daily Attendance (ADA) system attempts to increase the incentives for school districts, rather than parents, to improve attendance. The shift from ADM to ADA would certainly increase the financial incentives that school districts have to maintain a high level of attendance throughout the year. From this perspective of creating the right incentives, this proposal has it right.
What is not known, however, is that, even with the right incentives, can school districts do anything about increasing school attendance? Obviously, supporters of this change think they can. Those against this change, such as the Ohio School Boards Association, argue that “it’s out of their control.”
My answer: it’s probably somewhere in the middle although I don’t base that on any actual evidence. In fact, no one on either side of this debate is basing their argument on any evidence. Until such time as evidence is produced, it would not make good public policy to enact this change.
One way to find out how much of an impact school district policy can have on attendance is to see how school districts respond to the current system. After all, ADM is calculated by adding together the number of students enrolled in a school district who are in school or have an excused absence the first full week in October.
If attendance and excused absences rise the first full week of October relative to the rest of the year, then clearly school districts can have some impact on attendance.[5] Those interested in making this change could then proceed knowing that such a change is likely to improve attendance. Unfortunately, we don’t have hard evidence to suggest that it will at this current time.
This article was given as testimony before the Ohio Senate Education Committee on May 6, 2003.
Notes
[1] James D. Gwartney, Richard L. Stroup, and Russell L. Sobel, Economics: Private and Public Choice (9th edition; Philadelphia, PA: The Dryden Press, 2000), 12.
[2] New Hampshire had no system of funding until 1999.
[3] Jay P. Greene and Greg Forster, Effects of Funding Incentives on Special Education Enrollment, (New York: Manhattan Institute, December 2002).
[4] Public Choices, Private Costs: An Analysis of Spending and Achievement in Ohio Public Schools (Dayton, OH: The Buckeye Institute, September 1998), 24.
[5] The Legislative Office of Education Oversight, for example, could be directed to undertake such a study.
Joshua C. Hall is the director of the Buckeye Institute Center for Education Excellence and a lecturer in economics at Capital University.
