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Hagood Article on Impact of Performance Funding on Institutions of Higher Education

Lori Hagood

Lori Hagood (PhD 2017) has an article, "The Financial Benefits and Burdens of Performance Funding in Higher Education," released Online First by Educational Evaluation and Policy Analysis and scheduled to appear in the journal's June 2019 issue.

Hagood's article builds from her original dissertation research. She establishes state funding patterns associated with performance funding implementation and determines the extent to which performance funding favors some institutions over others and the impact of that funding on state appropriations and the effects across institution types.

Building on her dissertation research, Hagood's data set pulls from publicly available information from over 400 institutions covering nearly 30 years (1986 through 2014). She uses a difference-in-difference methodology, social construction, and policy design theory to seek answers to two guiding questions: How do performance funding policies affect state appropriations per student at public, four-year institutions?, and how do treatment effects vary by institution type (noting characteristics such as mission, admissions selectivity, student demographics, and range of degrees)? 

Rather than fairly incentivizing schools to improve outcomes, Hagood's findings indicate that the schools which most consistently experienced declines in funding associated with performance funding policies were more likely to show gains in bachelor’s degree production. Schools that benefited from performance funding exhibited no change in bachelor’s degree production. Hagood suggests that this result demonstrates that "performance funding policies are designed to benefit high-resource, politically connected institutions and burden low-resource, politically weak institutions."

Hagood concludes by advocating for a system of allocations that takes into consideration institutions’ total available resources and expands the capacity of underfunded institutions, rather than restrict it. 

Full article available at:

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Monday, March 25, 2019 - 11:06am

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