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Do Expenditures Other Than Instructional Expenditures Affect Graduation and Persistence Rates in American Higher Education

  • Douglas A. Webber
  • Ronald G. Ehrenberg

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.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15216.

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Date of creation: Aug 2009
Date of revision:
Publication status: published as 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:nbr:nberwo:15216
Note: ED LS
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  1. 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.
  2. SErgio Firpo & Nicole M. Fortin & Thomas Lemieux, 2006. "Unconditional Quantile Regressions," Textos para discussão 533, Department of Economics PUC-Rio (Brazil).
  3. Jill M. Constantine, 1995. "The effect of attending historically black colleges and universities on future wages of black students," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 48(3), pages 531-546, April.
  4. 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.
  5. 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.
  6. 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 424-31, August.
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