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The Effect of Large-scale Performance-Based Funding in Higher Education

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Listed:
  • Jason Ward

    (RAND Corporation Santa Monica, CA 90401)

  • Ben Ost

    (Department of Economics University of Illinois at Chicago Chicago, IL 60607)

Abstract

The use of performance-based funding that ties state higher education appropriations to performance metrics has increased dramatically in recent years, but most programs place at stake a small percent of overall funding. We analyze the effect of two notable exceptions—Ohio and Tennessee—where nearly all state funding is tied to performance measures. Using a difference-in-differences identification strategy along with a synthetic control approach, we find no evidence that these programs improve key academic outcomes.

Suggested Citation

  • Jason Ward & Ben Ost, 2021. "The Effect of Large-scale Performance-Based Funding in Higher Education," Education Finance and Policy, MIT Press, vol. 16(1), pages 92-124, Winter.
    • Handle: RePEc:tpr:edfpol:v:16:y:2021:i:1:p:92-124
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    References listed on IDEAS

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    Cited by:

    1. Kelchen, Robert & Ortagus, Justin & Rosinger, Kelly & Cassell, Alex, 2022. "The effects of state performance funding policies on student loan debt," Economics of Education Review, Elsevier, vol. 91(C).
    2. Jan Morten Dyrstad & Mia Marie Wallgren Sohlman & Tor Henrik Teigen, 2024. "Government funding incentives and study program capacities in public universities: theory and evidence," Oxford Economic Papers, Oxford University Press, vol. 76(2), pages 585-607.
    3. Frank Fernandez & Xiaodan Hu & Mark Umbricht, 2023. "Examining Wyoming’s Endowment Challenge Program: A Synthetic Control Analysis," Research in Higher Education, Springer;Association for Institutional Research, vol. 64(5), pages 654-674, August.
    4. Taylor K. Odle & Jennifer A. Delaney, 2022. "You are Admitted! Early Evidence on Enrollment from Idaho’s Direct Admissions System," Research in Higher Education, Springer;Association for Institutional Research, vol. 63(6), pages 899-932, September.
    5. Mark R. Umbricht & Frank Fernandez & Guillermo Ortega, 2023. "The Blind Side of College Athletics: Examining California’s Student Athlete Bill of Rights and Athletic Expenditures," Research in Higher Education, Springer;Association for Institutional Research, vol. 64(1), pages 33-57, February.
    6. Taylor K. Odle, 2022. "Free to Spend? Institutional Autonomy and Expenditures on Executive Compensation, Faculty Salaries, and Research Activities," Research in Higher Education, Springer;Association for Institutional Research, vol. 63(1), pages 1-32, February.

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