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The Unequal Impacts of Performance-Based Funding on Institutional Resources in Higher Education

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Abstract

The study examines the impact of various types of performance-based funding (PBF) policies on institutional resources across postsecondary institution types. Although 41 states have implemented PBF over time, the design and dosage of PBF policies look very different across PBF-adopting states. We leverage multiple quasi-experimental approaches and find that high-dosage PBF policies had a negative impact on state funding for four-year historically Black colleges and universities (HBCUs) and four-year institutions serving an above-average share of racially minoritized students. We also show that sporadic positive effects of PBF policies on state funding are concentrated primarily among non-minority serving institutions (non-MSIs) and institutions serving below-average shares of racially minoritized or low-income students. Taken together, our findings reveal the unequal impacts of PBF policies and suggest that PBF policy design is an important consideration with critical implications for under-resourced institutions and the underserved students they educate.

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Authors and Affiliations

  1. Higher Education Administration and Policy, University of Florida, 2705D Norman Hall , 32611, Gainesville, FL, USA

    Justin C. Ortagus & Garam Chu

  2. Department of Education Policy Studies and School of Public Policy (by courtesy), Pennsylvania State University, State College, PA, USA

    Kelly Ochs Rosinger

  3. Department of Educational Leadership and Policy Studies, University of Tennessee, Knoxville, USA

    Robert Kelchen

  4. Department of Education Policy Studies, Pennsylvania State University, State College, PA, USA

    Mitchell Lingo

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  1. Justin C. Ortagus
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Correspondence to Justin C. Ortagus.

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Ortagus, J.C., Rosinger, K.O., Kelchen, R. et al. The Unequal Impacts of Performance-Based Funding on Institutional Resources in Higher Education. Res High Educ 64, 705–739 (2023). https://doi.org/10.1007/s11162-022-09719-2

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