IDEAS home Printed from https://ideas.repec.org/a/tpr/edfpol/v16y2021i1p92-124.html
   My bibliography  Save this article

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

Author

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
    as

    Download full text from publisher

    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/edfp_a_00300
    Download Restriction: Access to PDF is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Webber, Douglas A. & Ehrenberg, Ronald G., 2010. "Do expenditures other than instructional expenditures affect graduation and persistence rates in American higher education?," Economics of Education Review, Elsevier, vol. 29(6), pages 947-958, December.
    2. Joyce B. Main & Amanda L. Griffith, 2019. "From SIGNALS to success? The effects of an online advising system on course grades," Education Economics, Taylor & Francis Journals, vol. 27(6), pages 608-623, November.
    3. Thomas S. Dee & James Wyckoff, 2015. "Incentives, Selection, and Teacher Performance: Evidence from IMPACT," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 34(2), pages 267-297, March.
    4. Eduardo Cavallo & Sebastian Galiani & Ilan Noy & Juan Pantano, 2013. "Catastrophic Natural Disasters and Economic Growth," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1549-1561, December.
    5. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    6. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    7. Sebastian Galiani & Brian Quistorff, 2017. "The synth runner package: Utilities to automate synthetic control estimation using synth," Stata Journal, StataCorp LP, vol. 17(4), pages 834-849, December.
    8. Eric P. Bettinger & Bridget Terry Long, 2018. "Mass Instruction or Higher Learning? The Impact of College Class Size on Student Retention and Graduation," Education Finance and Policy, MIT Press, vol. 13(1), pages 97-118, Winter.
    9. Nicholas W. Hillman & David A. Tandberg & Jacob P. K. Gross, 2014. "Performance Funding in Higher Education: Do Financial Incentives Impact College Completions?," The Journal of Higher Education, Taylor & Francis Journals, vol. 85(6), pages 826-857, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. 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).
    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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maximiliano Marzetti & Rok Spruk, 2023. "Long-Term Economic Effects of Populist Legal Reforms: Evidence from Argentina," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 65(1), pages 60-95, March.
    2. Girma, Sourafel & Paton, David, 2022. "Is assisted suicide a substitute for unassisted suicide?," European Economic Review, Elsevier, vol. 145(C).
    3. Nathan, Max, 2022. "Does light touch cluster policy work? Evaluating the tech city programme," Research Policy, Elsevier, vol. 51(9).
    4. Michael Dinerstein & Isaac M. Opper, 2022. "Screening with Multitasking," CESifo Working Paper Series 9869, CESifo.
    5. Denti, Daria & Iammarino, Simona, 2022. "Coming Out of the Woods. Do local support services influence the propensity to report sexual violence?," Journal of Economic Behavior & Organization, Elsevier, vol. 193(C), pages 334-352.
    6. David Gilchrist & Thomas Emery & Nuno Garoupa & Rok Spruk, 2023. "Synthetic Control Method: A tool for comparative case studies in economic history," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 409-445, April.
    7. Nadine McCloud, 2022. "Does domestic investment respond to inflation targeting? A synthetic control investigation," International Economics, CEPII research center, issue 169, pages 98-134.
    8. Amos Z. B. Flomo & Elissaios Papyrakis & Natascha Wagner, 2023. "Evaluating the economic effects of the Ebola virus disease in Liberia: A synthetic control approach," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1478-1504, August.
    9. Victor Hugo de Oliveira & Ines Lee & Climent Quintana‐Domeque, 2022. "The effect of increasing Women's autonomy on primary and repeated caesarean sections in Brazil," Health Economics, John Wiley & Sons, Ltd., vol. 31(8), pages 1800-1804, August.
    10. Pamela J. Smith & Sebastian J. Anti, 2022. "How does TRIPs compliance affect the economic growth of developing countries? Application of the Synthetic Control method," The World Economy, Wiley Blackwell, vol. 45(12), pages 3873-3906, December.
    11. Justin Wiltshire, 2021. "allsynth: Synthetic control bias-corrections utilities for Stata," 2021 Stata Conference 15, Stata Users Group.
    12. Nadine McCloud & Ajornie Taylor, 2022. "Does inflation targeting matter for international trade? A synthetic control analysis," Empirical Economics, Springer, vol. 63(5), pages 2427-2478, November.
    13. Philipp Breidenbach & Timo Mitze, 2022. "Large-scale sport events and COVID-19 infection effects: evidence from the German professional football ‘experiment’ [Semiparametric difference-in-differences estimators]," The Econometrics Journal, Royal Economic Society, vol. 25(1), pages 15-45.
    14. Vincent Geloso & Chandler S. Reilly, 2022. "Did the ‘Quiet Revolution’ Really Change Anything?," CIRANO Working Papers 2022s-30, CIRANO.
    15. Juan S. Mora‐Sanguinetti & Rok Spruk, 2023. "Economic effects of recent experiences of federalism: Analysis of the regionalization process in Spain," Journal of Regional Science, Wiley Blackwell, vol. 63(1), pages 30-63, January.
    16. Chu, Yu-Wei Luke & Townsend, Wilbur, 2019. "Joint culpability: The effects of medical marijuana laws on crime," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 502-525.
    17. Grodecka-Messi, Anna & Zhang, Xin, 2023. "Private bank money vs central bank money: A historical lesson for CBDC introduction," Journal of Economic Dynamics and Control, Elsevier, vol. 154(C).
    18. Gamboa, Luis Fernando & Rodriguez Lesmes, Paul, 2019. "The fertility-inhibiting effect of mosquitoes: Socio-economic differences in response to the Zika crisis in Colombia," Economics & Human Biology, Elsevier, vol. 35(C), pages 63-72.
    19. Imam Patrick Amir & Kpodar Kangni, 2021. "Does an Inclusive Citizenship Law Promote Economic Development?," Review of Law & Economics, De Gruyter, vol. 17(1), pages 35-69, March.
    20. 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.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:edfpol:v:16:y:2021:i:1:p:92-124. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kelly McDougall (email available below). General contact details of provider: https://direct.mit.edu/journals .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.