Do Performance-Based Funding Policies Affect Underrepresented Student Enrollment?. (3rd September 2018) - Kelchen, Robert
ABSTRACT: More states are using performance-based funding (PBF) systems in an effort to incentivize public colleges to operate more effectively. Responding to concerns about equity, states are also adopting provisions that encourage colleges to serve more students who at risk of not completing college. In this paper, I examine whether PBF policies in general—and more specifically policies that have provisions designed to incentivize colleges to enroll underrepresented students—are associated with the number of lower-income, underrepresented minority, and adult students enrolled at four-year public colleges. Using a generalized difference-in-difference framework, I find little evidence that PBF systems as a whole meaningfully affect underrepresented student enrollment. However, the presence of bonuses for serving at-risk students appears to help mitigate any efforts to enroll a more advantaged student body that may be present in other PBF systems.