Autism spectrum disorder (ASD) is a complex neurodevelopmental disorder that affects social interactions and communication. The prevalence of ASD has risen dramatically in recent years, but the underlying factors leading to this rise are not clear. In this paper, we test whether changes in state-level educational policy that impact school-level resources are associated with the rise in ASD diagnostic prevalence. Early identification of ASD can improve an array of outcomes for children, and school systems play an important role with identification of the condition. It is plausible that children attending schools with better resources from state governments are more likely to receive an ASD diagnosis and presumably appropriate services. We focus on one educational policy in particular, state-level rewards, which consist of a monetary transfer from state governments to school districts. To test the impact of educational rewards on ASD diagnosis, we rely on policy variation across states and time and estimate both two-way fixed effects (TWFE) models alongside recently advanced methods in the difference-in-differences (DiD) literature. Under a baseline TWFE specification we estimate that rewards policies are associated with a 18.46% increase in ASD diagnosis. Further, using DiD methods that account for bias in settings of differential policy timing, we find that the magnitude of the effect increases to 24.8%. We believe these findings to be suggestive evidence that educational rewards policies improved the likelihood of detection and diagnosis of ASD.
