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Patterns and Volatility in State Funding for Higher Education, 1951–2006


by Jennifer A. Delaney & William R. Doyle — 2018

Background: Numerous studies have addressed the determinants of higher education appropriations. Extending prior studies that only consider the relationship between higher education and one other state budget category, Delaney and Doyle develop and test an empirical model of the relationship between higher education and all other budget categories. Delaney and Doyle propose that higher education takes the form of a balance wheel in state budgets. They find that higher education is cut more than other budget categories in bad budget years and given larger increases in good budget years. Although previous work advances understanding of how states budget for higher education, it is limited in the length of time considered.

Purpose: This study makes two important contributions to the literature. First, it documents changes in the amount of volatility in state funding for higher education. Second, it identifies patterns in the volatility, and does so over a longer time period than has been investigated in past research, using data that spans over a half century (1951–2006).

Research Design: This study uses a unique panel dataset spanning the period from 1951 to 2006 to quantitatively document changes in the extent of volatility in state funding for higher education. It also identifies and tests for patterns of volatility.

Findings: We find that the level of volatility in state budgeting for higher education has changed over time. We also find evidence of linear (incremental), quadratic (countercyclical), and cubic (balance wheel) patterns of volatility at different points in time.

Recommendations: Our findings indicate that the role of higher education in state budgets is not static and has varied over time. In policy discussions about higher education funding, we think it is important to consider both absolute funding levels and the amount of volatility in funding. We recommend that higher education leaders discuss not only funding levels with their state legislatures, but also discuss volatility in funding patterns. States and higher education have operated under different funding relationships in the past; therefore, it seems possible that policymakers and higher education officials could change their current funding relationship to conform to a pattern that better serves the needs of the state, institutions, and students.



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Cite This Article as: Teachers College Record Volume 120 Number 6, 2018, p. 1-42
http://www.tcrecord.org ID Number: 22366, Date Accessed: 11/19/2018 11:20:47 AM

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About the Author
  • Jennifer Delaney
    University of Illinois at Urbana-Champaign
    E-mail Author
    JENNIFER A. DELANEY is Associate Professor of Higher Education at the University of Illinois at Urbana-Champaign. Her research focuses on higher education policy with an emphasis on finance. Her recent publications include works on guaranteed tuition, federal academic earmarks, the timing of international higher education policy adoption, and state spending on higher education capital. She holds a PhD in higher education administration from Stanford University, an EdM in Higher Education Administration from Harvard University, and a BA in English from the University of Michigan.
  • William Doyle
    Vanderbilt University
    E-mail Author
    WILLIAM R. DOYLE is Associate Professor of Higher Education at Vanderbilt University. His research includes evaluating the impact of higher education policy, the antecedents and outcomes of higher education policy at the state level, and the study of political behavior as it affects higher education. His recent publications have focused on college completion, community colleges, transfer rates between two- and four-year institutions, and prepaid tuition plans. He received a master’s degree in political science and a PhD in higher education administration from Stanford University, and a BA in philosophy and liberal arts from Villanova University.
 
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