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Guaranteed Tuition Policies and State General Appropriations for Higher Education: A Difference-in-Difference Analysis

Guaranteed Tuition Policies and State General Appropriations for Higher Education: A... Jennifer A. Delaney1 and Tyler D. Kearney This study explores the impact of state-level guaranteed tuition laws on state general appropriations for higher education. Using the "Truth-in-Tuition" law that was implemented in Illinois in 2004 as the treatment condition, this study analyzes data from 2000­2012. To test the direction and size of the effect on state general appropriations, this work uses a quasi-experimental, differencein-difference methodology with a national panel dataset of public four-year institutions. Institutions in Illinois experienced significant decreases in state appropriations following the introduction of the guaranteed tuition law compared to the secular trend. In the baseline model presented in this paper, the magnitude of the cut to higher education institutions is shown to be $29.6 million, or approximately 20%, compared to the 2004 mean, on average, as compared to institutions that were not subject to guaranteed tuition laws. Both the direction and the magnitude of the finding are robust to alternative specifications including models that compare institutions with similar governance structures, Carnegie classifications, and in models that consider the impact over time. Inferences about the merits of guaranteed tuition laws are also discussed. State general appropriations serve as the primary funding stream for public higher http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Education Finance University of Illinois Press

Guaranteed Tuition Policies and State General Appropriations for Higher Education: A Difference-in-Difference Analysis

Delaney, Jennifer A.
Journal of Education Finance , Volume 40 (4) – Oct 24, 2015
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Publisher
University of Illinois Press
Copyright
Copyright © University of Illinois Press
ISSN
1944-6470
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Abstract

Jennifer A. Delaney1 and Tyler D. Kearney This study explores the impact of state-level guaranteed tuition laws on state general appropriations for higher education. Using the "Truth-in-Tuition" law that was implemented in Illinois in 2004 as the treatment condition, this study analyzes data from 2000­2012. To test the direction and size of the effect on state general appropriations, this work uses a quasi-experimental, differencein-difference methodology with a national panel dataset of public four-year institutions. Institutions in Illinois experienced significant decreases in state appropriations following the introduction of the guaranteed tuition law compared to the secular trend. In the baseline model presented in this paper, the magnitude of the cut to higher education institutions is shown to be $29.6 million, or approximately 20%, compared to the 2004 mean, on average, as compared to institutions that were not subject to guaranteed tuition laws. Both the direction and the magnitude of the finding are robust to alternative specifications including models that compare institutions with similar governance structures, Carnegie classifications, and in models that consider the impact over time. Inferences about the merits of guaranteed tuition laws are also discussed. State general appropriations serve as the primary funding stream for public higher

Journal

Journal of Education Finance – University of Illinois Press

Published: Oct 24, 2015

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