From Policy to Outcome: How Economic Conditions and National Funding Affect Graduation Rates: Case of Lithuanian Universities

This study examines how national public funding and macroeconomic conditions affect higher education performance, measured by graduation rates. A panel dataset covering 2013–2022 and ten Lithuanian public universities integrates economic, financial, and institutional variables. Lithuania applies a mixed higher education funding model that combines institutional support with elements of student-based financing, where part of the public resources follow individual enrollment patterns. Both immediate and lagged effects are analyzed using multiple regression models with time-lag factors. A review of academic literature indicates that increased funding does not necessarily lead to better outcomes; instead, the strategic allocation of resources to priority areas is particularly important. The results confirm that macroeconomic factors are statistically significant and that overall public funding does not have a positive impact unless it is allocated efficiently. On the contrary, funding directed toward research and infrastructure consistently shows a positive effect. These findings underscore the importance of evaluating the effectiveness of education policy through lagged impact analysis.