This policy brief reports on a study exploring state by state variation in placement rates for students with disabilities in either regular or special education settings and the relationship of economic, sociodemographic, and educational factors to these rates. The study analyzed data for the school year 1992-93 and compared the percent of identified students placed into six settings: regular class, resource room, separate class, separate school, residential facility, or homebound/hospital. It also interviewed state level personnel in three states with relatively high rates of placement in regular class settings. Although overall, placement data showed an orderly progression from most students served in the least restrictive setting (regular class) to the fewest number served in the most restrictive settings (separate facilities), analysis by disability category showed that most students with learning disabilities are served in resource room settings and most students with severe emotional disturbances and mental retardation are served in separate classes. Application of several prediction models found achievement variables emerged as predictors for all disabilities combined, but that a wide variety of other factors, including economic and demographic variables, predicted placement of students with specific disabilities. Results suggest the need to incorporate systems approaches to special education issues. Graphs detail study findings by disability and state. (Contains 29 references.) (DB)