abstract:

This study considers the relationship between federal academic earmarks and three types of state spending for higher education – general appropriations, capital outlays, and student financial aid. Often referred to as “pork,” federal academic earmarks are both controversial and understudied. Using a unique panel dataset from 1990-2003, this study employs an instrumental variables approach based on Congressional committee representation to estimate the effect of federal academic earmarks on state spending for higher education. It does not appear that state policymakers trade off different types of spending for higher education following the receipt of federal academic earmarks. Instead, federal academic earmarks appear to have either neutral or complementary relationships with nearly all types of state spending for higher education. The effects are found to be robust to alternative specifications including analyses that incorporate time lags. Policy implications of these findings for institutional and state leaders are discussed.