Abstract

abstract:

A substantial body of literature has examined factors related to levels of public funding of higher education and to changes in public funding of higher education over the last few decades. Volatility in funding for higher education has not been examined in as much detail. Given the positive externalities associated with increasing the college educated population, volatile funding for higher education has the potential to hurt long-term economic and sociocultural development. In this study we seek to (1) propose different measures of volatility in state funding for higher education and (2) to establish which institution-and state-level factors are associated with higher levels of volatility in higher education funding. Our theoretical framework, derived from earlier work in this area, focuses on four broad areas that can drive volatility in funding: economic forces, political changes, governance arrangements, and institutional factors. In our preferred models, we find that, for unit-specific trends, two-year institutions experience substantially higher levels of volatility than four-year institutions, unemployment rates are associated with higher volatility, and higher tuition is associated with lower levels of volatility. When considering variation from the state-specific trend, governance arrangements may play some role in "buffering" institutions from volatility in spending, particularly if the governor appoints the State Higher Education Executive Officer.

pdf