Adjusted Poverty Measures and the Distribution of Title I Aid: Does Title I Really Make the Rich States Richer?
Federal and state governments in the United States make extensive use of student poverty rates in compensatory aid programs such as Title I. Unfortunately, the measures of student poverty that drive funding allocations under such programs are biased because they fail to reflect geographic differences in the cost of living.
In this study published in the Association for Education Finance Policy journal, the authors construct alternative poverty income thresholds based on regional differences in the wage level for low-skilled workers. They then examine the distribution of Title I revenues after adjusting poverty rates for geographic differences in the cost of living and adjusting Title I revenues for geographic differences in the purchasing power of school districts.
The findings turn conventional wisdom on its head: when fully adjusted for regional differences, Title I funding patterns disproportionately favor rural school districts in low cost of living states. The authors conclude with policy recommendations for revising Title I funding formulas.