PROPERTY LEFT BEHIND: AN UNINTENDED CONSEQUENCE OF A NO CHILD LEFT BEHIND “FAILING” SCHOOL DESIGNATION

Abstract

ABSTRACT. Under the No Child Left Behind Act (NCLB), schools receiving Title I funding thatfail to meet adequate academic performance targets for two consecutive years are deemed “failing.”This broadly defined, but often misunderstood designation has exerted a negative and unintendedeffect on low-income neighborhoods—the same neighborhoods NCLB was originally intended to help.Specifically, we find that “failing” designations significantly decrease home prices. This property valueresponse is observed even after controlling for a myriad of traditional test score measures and school-level student demographics. Additional analyses suggest that this home price effect is largely due tostrong perceptions of poor school quality or social stigma surrounding a “failing” designation. 1. INTRODUCTIONIn January 2002, President George W. Bush signed into law the No Child Left Be-hind Act (NCLB), which was aimed at increasing K–12 academic standards and raisingschool accountability through measurable goals. Under NCLB, on a yearly basis schoolsare required to satisfy a series of academic performance targets in order to achieve Ade-quate Yearly Progress (AYP). Schools receiving Title I funding