It was a medical and public policy mystery.

In the last decade, the rate of children diagnosed with Attention Deficit Hyperactivity Disorder (ADHD) has gone up by more than 40% nationwide. What could account for such a sharp increase?

In their new book, The ADHD Explosion: Myths, Medication, Money, and Today's Push for Performance (Oxford University Press, March 2014), Professor Richard M. Scheffler, a health economist and Professor Stephen P. Hinshaw, a clinical psychologist combine their expertise to sleth out the answers.

Because there was a large state-by-state variation in ADHD diagnosis, Professors Scheffler and Hinshaw were able to use extensive data collected by the Center for Disease Control to examine variations in demographics, health care, provider availability and even genetics. Nothing could account for such a steep rise.

“Since we could not find the answer among the usual suspects like healthcare or demography, we looked to something outside the system,” says Professor Scheffler. “Some policy was having an unintended consequence on the rate of ADHD diagnosis.”

The first “a-ha” moment in their investigation arrived when they came across the astounding fact that 30% of all high school boys in North Carolina have an ADHD diagnosis.

“In the 1990s, the philosophy of funding education went through a rapid change from budgeting funding based on the number of students and teachers to performance-based budgeting,” says Professor Scheffler. Initially, about 30 states adopted performance-based budgeting while 20 did not.

In 2002, No Child Left Behind went into effect, making performance budgeting a condition of receiving federal education funding. At that time, most states chose to adopt some form of performance budgeting. “This development gave us a natural difference-in-difference design,” says Professor Scheffler, referring to an econometrics technique that measures the effect of a particular event over a specific period of time.

“Performance budgeting put enormous pressure on the schools to raise test scores, especially among poor children,” he says. Their research revealed almost a 60% increase in ADHD diagnosis among poor children but a mere 5-6% increase among not-poor children. “It was as close as you can get to a smoking gun,” says Professor Scheffler. The findings have been reported in major media outlets and their NY Times op-ed, “Expand Pre-K, Not ADHD,” has gone viral.

Early childhood education is a sound idea, but it is likely to come with increased pressure for children to perform academically, at a younger age.

“Early diagnosis of ADHD is a good thing,” says Professor Scheffler. “But proper diagnosis requires an investment of time and resources. It takes hours, in at least three different environments.” He notes that the American Academy of Pediatrics now recommends that ADHD drugs can be administered to children as young as four. The Federal Drug Administration has also approved ADHD drugs for very young children. “With these new guidelines and the push for universal preschool,” says Professor Scheffler, “It could be the perfect ADHD storm.”