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Do expenditures other than instructional expenditures affect graduation and persistence rates in American higher education?

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  • Webber, Douglas A.
  • Ehrenberg, Ronald G.

Abstract

During the last two decades, median instructional spending per full-time equivalent (FTE) student at American 4-year colleges and universities has grown at a slower rate than median spending per FTE student in a number of other expenditure categories, including academic support, student services and research. Our paper uses institutional level panel data and a variety of econometric approaches, including unconditional quantile regression methods, to analyze whether these non-instructional expenditure categories influence graduation and first-year persistence rates of undergraduate students. Our most important finding is that student service expenditures influence graduation and persistence rates and their marginal effects are higher for students at institutions with lower entrance test scores and higher Pell Grant expenditures per student. Put another way, their effects are largest at institutions that have lower current graduation and first-year persistence rates. Simulations suggest that reallocating some funding from instruction to student services may enhance persistence and graduation rates at those institutions whose rates are currently below the medians in the sample.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:ecoedu:v:29:y:2010:i:6:p:947-958
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    References listed on IDEAS

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    1. Roland G. Fryer & Michael Greenstone, 2007. "The Causes and Consequences of Attending Historically Black Colleges and Universities," NBER Working Papers 13036, National Bureau of Economic Research, Inc.
    2. Dolan, Robert C. & Schmidt, Robert M., 1994. "Modeling institutional production of higher education," Economics of Education Review, Elsevier, vol. 13(3), pages 197-213, September.
    3. Pfeifer, Christian & Cornelißen, Thomas, 2010. "The impact of participation in sports on educational attainment--New evidence from Germany," Economics of Education Review, Elsevier, vol. 29(1), pages 94-103, February.
    4. de Groot, Hans & McMahon, Walter W & Volkwein, J Fredericks, 1991. "The Cost Structure of American Research Universities," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 424-431, August.
    5. Sergio Firpo & Nicole M. Fortin & Thomas Lemieux, 2009. "Unconditional Quantile Regressions," Econometrica, Econometric Society, vol. 77(3), pages 953-973, May.
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    Citations

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    Cited by:

    1. Amanda L. Griffith & Kevin N. Rask, 2016. "The Effect Of Institutional Expenditures On Employment Outcomes And Earnings," Economic Inquiry, Western Economic Association International, vol. 54(4), pages 1931-1945, October.
    2. John Bound & Michael F. Lovenheim & Sarah Turner, 2012. "Increasing Time to Baccalaureate Degree in the United States," Education Finance and Policy, MIT Press, vol. 7(4), pages 375-424, September.
    3. Ehrenberg, Ronald G., 2010. "Analyzing the factors that influence persistence rates in STEM field, majors: Introduction to the symposium," Economics of Education Review, Elsevier, vol. 29(6), pages 888-891, December.
    4. repec:bla:coecpo:v:35:y:2017:i:4:p:658-676 is not listed on IDEAS
    5. Robert Martin, 2013. "Do Colleges and Universities "Manage" Their Financial Reporting?," Challenge, Taylor & Francis Journals, vol. 56(5), pages 85-99.
    6. Jan Kluge & Michael Weber, 2015. "Decomposing the German East-West wage gap," ifo Working Paper Series 205, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    7. Kurlaender, Michal & Jackson, Jacob & Howell, Jessica S. & Grodsky, Eric, 2014. "College course scarcity and time to degree," Economics of Education Review, Elsevier, vol. 41(C), pages 24-39.
    8. repec:spr:reihed:v:59:y:2018:i:2:d:10.1007_s11162-017-9462-2 is not listed on IDEAS
    9. Smith, Jonathan & Pender, Matea & Howell, Jessica, 2013. "The full extent of student-college academic undermatch," Economics of Education Review, Elsevier, vol. 32(C), pages 247-261.
    10. Zhao, Bo, 2018. "Disinvesting in the future?: a comprehensive examination of the effects of state appropriations for public higher education," Working Papers 18-1, Federal Reserve Bank of Boston.
    11. repec:spr:reihed:v:59:y:2018:i:1:d:10.1007_s11162-017-9455-1 is not listed on IDEAS
    12. Ronald G. Ehrenberg, 2012. "American Higher Education in Transition," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 193-216, Winter.
    13. Ozan Jaquette & Edna Parra, 2016. "The Problem with the Delta Cost Project Database," Research in Higher Education, Springer;Association for Institutional Research, vol. 57(5), pages 630-651, August.
    14. repec:spr:reihed:v:59:y:2018:i:2:d:10.1007_s11162-017-9459-x is not listed on IDEAS
    15. Webber, Douglas A., 2012. "Expenditures and postsecondary graduation: An investigation using individual-level data from the state of Ohio," Economics of Education Review, Elsevier, vol. 31(5), pages 615-618.
    16. Javier García-Estévez & Néstor Duch-Brown, 2012. "Student graduation: to what extent does university expenditure matter?," Working Papers 2012/4, Institut d'Economia de Barcelona (IEB).
    17. Aaron S. Horn & Giljae Lee, 2016. "The Reliability and Validity of Using Regression Residuals to Measure Institutional Effectiveness in Promoting Degree Completion," Research in Higher Education, Springer;Association for Institutional Research, vol. 57(4), pages 469-496, June.

    More about this item

    Keywords

    Educational finance Higher education Educational production function;

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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