The Unequal Impacts of Performance-Based Funding on Institutional Resources in Higher Education

Justin C. Ortagus (), Kelly Ochs Rosinger (), Robert Kelchen (), Garam Chu () and Mitchell Lingo ()
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Justin C. Ortagus: University of Florida
Kelly Ochs Rosinger: Pennsylvania State University
Robert Kelchen: University of Tennessee
Garam Chu: University of Florida
Mitchell Lingo: Pennsylvania State University

Research in Higher Education, 2023, vol. 64, issue 5, No 4, 705-739

Abstract: Abstract The study examines the impact of various types of performance-based funding (PBF) policies on institutional resources across postsecondary institution types. Although 41 states have implemented PBF over time, the design and dosage of PBF policies look very different across PBF-adopting states. We leverage multiple quasi-experimental approaches and find that high-dosage PBF policies had a negative impact on state funding for four-year historically Black colleges and universities (HBCUs) and four-year institutions serving an above-average share of racially minoritized students. We also show that sporadic positive effects of PBF policies on state funding are concentrated primarily among non-minority serving institutions (non-MSIs) and institutions serving below-average shares of racially minoritized or low-income students. Taken together, our findings reveal the unequal impacts of PBF policies and suggest that PBF policy design is an important consideration with critical implications for under-resourced institutions and the underserved students they educate.

Date: 2023
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DOI: 10.1007/s11162-022-09719-2

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