From Policy to Outcome: How Economic Conditions and National Funding Affect Graduation Rates: Case of Lithuanian Universities

Gintarė Židonė () and Rytis Krušinskas
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Gintarė Židonė: School of Economics and Business, Kaunas University of Technology, LT-44249 Kaunas, Lithuania
Rytis Krušinskas: School of Economics and Business, Kaunas University of Technology, LT-44249 Kaunas, Lithuania

Economies, 2025, vol. 13, issue 6, 1-20

Abstract: This study examines how national public funding and macroeconomic conditions affect higher education performance, measured by graduation rates. A panel dataset covering 2013–2022 and ten Lithuanian public universities integrates economic, financial, and institutional variables. Lithuania applies a mixed higher education funding model that combines institutional support with elements of student-based financing, where part of the public resources follow individual enrollment patterns. Both immediate and lagged effects are analyzed using multiple regression models with time-lag factors. A review of academic literature indicates that increased funding does not necessarily lead to better outcomes; instead, the strategic allocation of resources to priority areas is particularly important. The results confirm that macroeconomic factors are statistically significant and that overall public funding does not have a positive impact unless it is allocated efficiently. On the contrary, funding directed toward research and infrastructure consistently shows a positive effect. These findings underscore the importance of evaluating the effectiveness of education policy through lagged impact analysis.

Keywords: graduation rate; public funding for higher education; effectiveness of public education expenditure; time-lag effects (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jecomi:v:13:y:2025:i:6:p:170-:d:1677223

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