Exploring Heterogeneous Effects of Performance-Based Funding: Implications for Equity and Policy

• In Event: 25.056 - Resources Allocation in Pre-K–16 Education

Abstract

The goal of this study is to estimate the effects of an enhanced version of performance-based funding (PBF 2.5) that allocates up to 25% of appropriations via performance metrics. I uses a difference-in-differences approach to examine the tradeoff between equity and institutional performance. PBF policies have explicit goals of increased degree production, however, schools may be incentivized to meet these goals through nefarious strategies. Moreover, schools that are more dependent upon the state may face larger incentives to meet performance goals. I estimate how these effects vary with fiscal dependency. By using resource dependence theory to further explicate the principal-agent relationship that exists between state governments and public colleges, I develop a new framework for understanding heterogeneous policy effects.

Author

• James Dean Ward, Ithaka S+R