State funding for public higher education: explaining the great retreat

Joe Stone

MPRA Paper from University Library of Munich, Germany

Abstract: This study examines reasons for the decline in state funding for public higher education. Prior studies point to Medicaid costs, limitations on tax revenues, income inequality, and Pell grants, but do not estimate their relative importance. Results in this study indicate that income inequality, Pell grants, and K-12 funding are the dominant factors. Pell grants in particular, create powerful incentives for states to substitute Federal dollars for their own. Estimates are identified using 5-year difference-in-differences for 49 states from 1957 to 2007. Regression, instrumental-variables, and Granger-causality estimates yield consistent results.

Keywords: higher education; pell grants; k=12 education; public funding (search for similar items in EconPapers)
JEL-codes: A1 D31 H52 (search for similar items in EconPapers)
Date: 2012-03, Revised 2012-03
New Economics Papers: this item is included in nep-lab and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:39732

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