This article presents the results of a study that examined the relationships between specific state level financial and demographic characteristics and variability in the identification and degree of mainstreaming of mildly handicapped students. Results of this investigation indicate that much of the variance among states in terms of numbers of handicapped students and LD students identified and use of special versus mainstreamed placement is accounted for by the amount of financial resources states and locals commit to education, a state's minority enrollment, and the number of children living in poverty.
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