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Evaluating the Effects of Performance-Based Funding Policies 2.0 on State Expenditures to Public Higher Education: Evidence from the States

Evaluating the Effects of Performance-Based Funding Policies 2.0 on State Expenditures to Public... <p>abstract:</p><p>The primary goal of this analysis is to examine the relationship between Performance-Based Funding (PBF) 2.0 policies and state expenditures to public higher education. Because “new accountability” theories suggest that when states seek to hold public higher education institutions accountable by impacting their revenues, public funding patterns should shift in some way to reflect this new set of inducements. Using a quasi-experimental design, difference-in-differences, I compared spending differences on public higher education before and after PBF 2.0 policy adoption in 50 states from 1995–96 to 2012–13. The findings show that PBF 2.0 policies exert a downward pressure on state spending to public higher education by between 5.55% and 10.68% when compared against states without such a policy. The results suggest that PBF policies may further exacerbate an already rough funding environment.</p> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Education Finance University of Illinois Press

Evaluating the Effects of Performance-Based Funding Policies 2.0 on State Expenditures to Public Higher Education: Evidence from the States

Journal of Education Finance , Volume 46 (1) – Mar 10, 2021

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Publisher
University of Illinois Press
Copyright
Copyright © Board of Directors of the Journal of Education Finance, Inc.
ISSN
1944-6470

Abstract

<p>abstract:</p><p>The primary goal of this analysis is to examine the relationship between Performance-Based Funding (PBF) 2.0 policies and state expenditures to public higher education. Because “new accountability” theories suggest that when states seek to hold public higher education institutions accountable by impacting their revenues, public funding patterns should shift in some way to reflect this new set of inducements. Using a quasi-experimental design, difference-in-differences, I compared spending differences on public higher education before and after PBF 2.0 policy adoption in 50 states from 1995–96 to 2012–13. The findings show that PBF 2.0 policies exert a downward pressure on state spending to public higher education by between 5.55% and 10.68% when compared against states without such a policy. The results suggest that PBF policies may further exacerbate an already rough funding environment.</p>

Journal

Journal of Education FinanceUniversity of Illinois Press

Published: Mar 10, 2021

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