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On her return to New Zealand, Clay moved to the small town of Wanganui and continued to teach in the elementary grades. Because of her interest in and expertise with children with special needs, the district placed many high-need students in her class. In 1955, Clay moved to Auckland and worked in the Department of Education’s newly established Psychological Services.

In 1960, Clay was offered a temporary position at the University of Auckland to assist with a new Diploma of Educational Psychology, a postgraduate training program for educational psychologists. Two years later, this became a permanent appointment. Clay continued to be involved in teaching developmental psychology, consultation, testing, and measurement to school psychologists for the next twenty-five years.

Around the time that Clay was studying in Minnesota, Samuel Kirk and Barbara Bateman were developing the Illinois Test of Psycholinguistic Abilities (ITPA) at the University of Illinois. This test was designed to guide remediation for children whose poor academic achievement was not attributable to intellectual, social, or emotional deficits. In the research, she found herself in disagreement with the assumptions underlying the ITPA and other special-education assessments. Clay’s developing criticism of the theoretical perspectives and the nature of instruction in the field of learning disabilities was a catalyst for much of her subsequent work. Her classic article, “Learning to Be Learning Disabled,” represents the culmination of her thinking on issues of identification, assessment, and teaching students with learning disabilities (Clay, 1987). Her challenges to current practice in preventing and recovering from literacy learning difficulties are no less relevant and urgent today than they were more than a decade ago.

In 1963, Clay began to investigate her doctoral research question, “Can we see the process of learning to read and write going astray close to the onset of instruction?” In her dissertation, “Emergent Reading Behaviour,” she describes the week-by-week progress of one hundred children during their first year of school (Clay 1966). An important outcome of her dissertation and subsequent research was the development of reliable observation tools for the assessment and fine-grained analysis of changes over time in children’s early literacy learning. These assessments constitute An Observation Survey of Early Literacy Achievement (Clay, 1993a), which has also been reconstructed and validated for the Spanish, Maori, and French languages. Clay’s observational methodology and clinical orientation arise from her training in developmental psychology and have kept her close to the source of literacy learning—the children and their teachers. This proximity may partially account for her perspectives on literacy learning, which differ, sometimes dramatically, from those of other researchers.

From her early research, she published Reading: The Patterning of Complex Behaviour (Clay, 1972), which changed through three editions and formed the basis of Clay’s theoretical description of young children’s developing control over literacy learning, as presented in Becoming Literate: The Construction of Inner Control (Clay, 1991). She has been a regular contributor to peer-reviewed publications (1967, 1970, 1971, 1974, 1985, 1987, 1997), a member of editorial committees for journals (such as the New Zealand Journal of Educational Studies, the New Zealand Psychologist, the Reading Research Quarterly, the Journal of Reading Behaviour, and the new Journal of Early Childhood Literacy), and she wrote an introduction to the fourth edition of Theoretical Models and Processes of Reading (Ruddell, Ruddell, & Singer, 1994).

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