Causal Inference in Education Research Seminar (CIERS): Performance-based Funding

Abstract

Performance-based funding policies allocate state appropriations according to specific formulas that include student success outcomes. More than half the states across the country have implemented performance-based funding policies to increase higher education accountability and transparency. In this work in progress, I describe the history of performance-based funding, provide current examples of policies throughout the country, and summarize the current research on performance-based funding. Then, I explain some of the limitations of the prior research. To address some of the concerns of past research, I focus on community colleges in the state of Ohio to explore the effect of performance-based funding at the institution level. In the aggregate, I find that performance-based funding in Ohio may not be effective at increasing associate’s degrees. Preliminary results also suggest that the effect of performance-based funding may not vary by institutional characteristics.