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A Poison Pell for Public Colleges? Pell Grants and Funding for Public Colleges in the U. S

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  • Stone, Joe A.

Abstract

This study links federal Pell grants to college students in the United States to the decades-long decline in state-local funding for public colleges. The effect is at least as significant as other explanations based on taxes, Medicaid, or K-12 funding. Estimates are obtained from multiple identification strategies, including a crossover, repeated-measures (RM) design—a powerful design particularly well suited to the Pell program. The results offer a compelling example of how federal funding can induce an unintended cascade of effects even when it is given to individuals, not as traditional inter-governmental grants.

Suggested Citation

  • Stone, Joe A., 2016. "A Poison Pell for Public Colleges? Pell Grants and Funding for Public Colleges in the U. S," MPRA Paper 71761, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:71761
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    References listed on IDEAS

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    1. Eric Bettinger & Betsy Williams, 2013. "Federal and State Financial Aid during the Great Recession," NBER Chapters, in: How the Financial Crisis and Great Recession Affected Higher Education, pages 235-262, National Bureau of Economic Research, Inc.
    2. Fisher, Ronald C., 1982. "Income and grant effects on local expenditure: The flypaper effect and other difficulties," Journal of Urban Economics, Elsevier, vol. 12(3), pages 324-345, November.
    3. Mofidi, Alaeddin & Stone, Joe A, 1990. "Do State and Local Taxes Affect Economic Growth?," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 686-691, November.
    4. Stone, Joe, 2012. "State funding for public higher education: explaining the great retreat," MPRA Paper 39732, University Library of Munich, Germany, revised Mar 2012.
    5. Singell, Larry D, Jr & Stone, Joe A, 2002. "The Good, the Poor and the Wealthy: Who Responds Most to College Financial Aid?," Bulletin of Economic Research, Wiley Blackwell, vol. 54(4), pages 393-407, October.
    6. Elizabeth U. Cascio & Nora Gordon & Sarah Reber, 2013. "Local Responses to Federal Grants: Evidence from the Introduction of Title I in the South," American Economic Journal: Economic Policy, American Economic Association, vol. 5(3), pages 126-159, August.
    7. Robert B. Archibald & David H. Feldman, 2006. "State Higher Education Spending and the Tax Revolt," The Journal of Higher Education, Taylor & Francis Journals, vol. 77(4), pages 618-644, July.
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    More about this item

    Keywords

    college; tuition; education; Pell; Medicaid; taxes;
    All these keywords.

    JEL classification:

    • H0 - Public Economics - - General
    • I2 - Health, Education, and Welfare - - Education
    • J0 - Labor and Demographic Economics - - General

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