The recent federal education bill, No Child Left Behind, requires states to test students in grades three to eight each year, and to judge school performance on the basis of these test scores. While intended to maximize student learning, there is little empirical evidence about the effectiveness of such policies. This study examines the impact of an accountability policy implemented in the Chicago Public Schools in 1996-97. Using a panel of student-level, administrative data, I find that math and reading achievement increased sharply following the introduction of the accountability policy, in comparison to both prior achievement trends in the district and to changes experienced by other large, urban districts in the mid-west. I demonstrate that these gains were driven largely by increases in test-specific skills and student effort, and did not lead to comparable gains on a state-administered, low-stakes exam. I also find that teachers responded strategically to the incentives along a variety of dimensions – by increasing special education placements, preemptively retaining students and substituting away from low-stakes subjects like science and social studies.
I would like to thank the Chicago Public Schools, the Illinois State Board of Education and the Consortium on Chicago School Research for providing the data used in this study. I am grateful to Peter Arcidiacono, Anthony Bryk, Susan Dynarski, Carolyn Hill, Robert LaLonde, Lars Lefgren, Steven Levitt, Helen Levy, Susan Mayer, Melissa Roderick, Robin Tepper and seminar participants at various institutions for helpful comments and suggestions. Jenny Huang provided excellent research assistance. Funding for this research was provided by the Spencer Foundation. All remaining errors are my own. The views expressed herein are those of the author and not necessarily those of the National Bureau of Economic Research.