Evaluating the Impacts of “New” Performance Funding in Higher Education

First Published December 1, 2015 Research Article

Authors

University of Wisconsin-Madison
by this author
,
Florida State University
by this author
,
University of Oklahoma
by this author
First Published Online: December 1, 2015

In 2007, Washington adopted the Student Achievement Initiative, a statewide performance accountability system designed to improve retention rates and degree productivity among community colleges. Using difference-in-differences analysis, we found that the policy change has had little immediate effect on retention rates or associate’s degree productivity. However, community colleges produced more short-term certificates after the policy reform. These results are robust across many alternative comparison groups. Considering that certificates yield less value in the labor market than associate’s degrees but are easier for colleges to produce, we discuss the unintended consequences of rewarding colleges based on the number of credentials they produce.

Altstadt, D. (2012). Tying funding to community college outcomes: Models, tools, and recommendations for states (Jobs for the Future). Retrieved from http://www.jff.org/sites/default/files/publications/TyingFunding2CommColleges-042312.pdf
Google Scholar
Bahr, P. R. (2013). The deconstructive approach to understanding community college students’ pathways and outcomes. Community College Review, 41, 137153.
Google Scholar | SAGE Journals
Banta, T. W., Rudolph, L. B., Van Dyke, J., Fisher, H. S. (1996). Performance funding comes of age in Tennessee. The Journal of Higher Education, 67, 2345.
Google Scholar | ISI
Belfield, C. R. (2012). Washington state student achievement initiative: Achievement points analysis for academic years 2007–2011. Retrieved from http://ccrc.tc.columbia.edu/media/k2/attachments/sai-achievement-point-analysis.pdf
Google Scholar
Belfield, C. R., Liu, Y. T., Trimble, M. J. (2014, March). The medium-term labor market returns to community college awards: Evidence from North Carolina (Working paper). New York, NY: Center for Analysis of Postsecondary Education & Employment. Retrieved from http://capseecenter.org/wp-content/uploads/downloads/2014/03/medium-term-labor-market-return-to-community-college-awards.pdf
Google Scholar
Betts, J. R., McFarland, L. L. (1995). Safe port in a storm: The impact of labor market conditions on community college enrollments. Journal of Human Resources, 30, 741765.
Google Scholar | ISI
Bogue, E. G., Johnson, B. D. (2010). Performance incentives and public college accountability in the United States: A quarter century policy audit. Higher Education Management and Policy, 22(2), 930.
Google Scholar
Burke, J. C. (2005). The many faces of accountability. In Burke, J. (Ed.), Achieving accountability in higher education: Balancing public, academic and market demands (pp. 124). San Francisco, CA: Jossey-Bass.
Google Scholar
Burke, J. C., Minassians, H. (2001). Linking state resources to campus results: From fad to trend—The fifth annual survey. Retrieved from http://files.eric.ed.gov/fulltext/ED456781.pdf
Google Scholar
Burke, J. C., Minassians, H. P. (2003). Performance reporting: “Real” accountability or accountability “lite”—The seventh annual survey. Albany, NY: The Rockefeller Institute.
Google Scholar
Chun, Y. H., Rainey, H. G. (2005). Goal ambiguity and organizational performance in US federal agencies. Journal of Public Administration Research and Theory, 15, 529557.
Google Scholar | ISI
Dadgar, M., Weiss, M. J. (2012, June). Labor market returns to sub-baccalaureate credentials: How much does a community college degree or certificate pay? (CCRC Working Paper No. 45). New York, NY: Community College Research Center, Columbia University.
Google Scholar
Dougherty, K. J., Jones, S., Lahr, H., Natow, R., Pheatt, L., Reddy, V. (2013, July). Envisioning performance funding impacts: The espoused theories of action for state higher education performance funding in three states (Working Paper No. 63). New York, NY: Community College Research Center.
Google Scholar
Dougherty, K. J., Natow, R., Hare, R., Jones, S., Vega, B. (2011). The politics of performance funding in eight states: Origins, demise, and change. New York, NY: Community College Research Center.
Google Scholar
Dougherty, K. J., Natow, R. S., Vega, B. E. (2012). Popular but unstable: Explaining why state performance funding systems in the United States often do not persist. Teachers College Record, 114(3), 142.
Google Scholar | ISI
Dougherty, K. J., Reddy, V. T. (2011). The impacts of state performance funding systems on higher education institutions: Research literature review and policy recommendations. Retrieved from http://ccrc.tc.columbia.edu/media/k2/attachments/impacts-state-funding-higher-education.pdf
Google Scholar
Dougherty, K. J., Reddy, V. T. (2013). Performance funding for higher education: What are the mechanisms what are the impacts? ASHE Higher Education Report, 39(2). Retrieved from http://onlinelibrary.wiley.com/doi/10.1002/aehe.v39.2/issuetoc
Google Scholar
Dowd, A. C. (2003). From access to outcome equity: Revitalizing the democratic mission of the community college. The ANNALS of the American Academy of Political and Social Science, 586, 92119.
Google Scholar | SAGE Journals | ISI
Drukker, D. M. (2003). Testing for serial correlation in linear panel-data models. Stata Journal, 3, 168177.
Google Scholar | SAGE Journals
Garces, L. M. (2013). Understanding the impact of affirmative action bans in different graduate fields of study. American Educational Research Journal, 50, 251284.
Google Scholar | SAGE Journals | ISI
Harnisch, T. L. (2011). Performance-based funding (PBF): A re-emerging strategy in public higher education financing. Washington, DC: American Association of State Colleges and Universities.
Google Scholar
Hillman, N., Orians, E. (2013). Community colleges and labor market conditions: How does enrollment demand change relative to local unemployment rates? Research in Higher Education, 54, 765780.
Google Scholar | ISI
Hillman, N., Tandberg, D., Gross, J. (2014). Performance funding in higher education: Do financial incentives impact college completions? Journal of Higher Education, 85, 826857.
Google Scholar | ISI
Jenkins, P. D., Ellwein, T., Boswell, K. (2009). Formative evaluation of the student achievement initiative “learning year” (Report to the Washington State Board for Community and Technical Colleges and College Spark Washington). New York, NY: Community College Research Center.
Google Scholar
Jenkins, P. D., Shulock, N. (2013, March). Metrics, dollars, and systems change: Learning from Washington state’s student achievement initiative to design effective postsecondary performance funding policies (A State Policy Brief). New York, NY: Community College Research Center, Columbia University. Retrieved from http://ccrc.tc.columbia.edu/media/k2/attachments/student-achievement-initiative-policy-brief.pdf
Google Scholar
Jenkins, P. D., Wachen, J., Moore, C., Shulock, N. (2012). Washington state student achievement initiative policy study: Final report. New York, NY: Community College Research Center, Columbia University. Retrieved from http://ccrc.tc.columbia.edu/media/k2/attachments/student-achievement-initiative-final-report.pdf
Google Scholar
Jepsen, C., Troske, K., Coomes, P. (2014). The labor-market returns to community college degrees, diplomas, and certificates. Journal of Labor Economics, 32, 95121.
Google Scholar | ISI
Kuh, G., Kinzie, J., Schuh, J., Whitt, E. (2010). Student success in college: Creating conditions that matter (2nd ed.). San Francisco, CA: Jossey-Bass.
Google Scholar
Lavy, V. (2010). Effects of free choice among public schools. The Review of Economic Studies, 77, 11641191.
Google Scholar | ISI
Marcotte, D. E., Bailey, T., Borkoski, C., Kienzl, G. S. (2005). The returns of a community college education: Evidence from the National Education Longitudinal Survey. Educational Evaluation and Policy Analysis, 27, 157175.
Google Scholar | SAGE Journals | ISI
Mattoon, D. S. (2009). Short-term certificates: Case studies of three California community colleges (Doctoral dissertation, University of the Pacific). Available from ProQuest Dissertations and Theses database. (UMI No. 3356559)
Google Scholar
McGuinness, A. C. (1995). Prospects for state-higher education relations: A decade of grinding tensions. New Directions for Institutional Research, 1995(85), 3345.
Google Scholar
McKeown-Moak, M. P. (2013). The “new” performance funding in higher education. Educational Considerations, 40(2), 312.
Google Scholar
McLendon, M. K. (2003a). The politics of higher education: Toward an expanded research agenda. Educational Policy, 17, 165191.
Google Scholar | SAGE Journals | ISI
McLendon, M. K. (2003b). State governance reform of higher education: Patterns, trends, and theories of the public policy process. In Smart, J. C. (Ed.), Higher education: Handbook of theory and research (pp. 57143). Dordrecht, The Netherlands: Springer.
Google Scholar
McLendon, M. K., Cohen-Vogel, L. (2008). Understanding education policy change in the American States: Lessons from political science. In Cooper, B., Cibulka, J., Fusarelli, L. (Eds.), Handbook of education politics and policy (pp. 3051). New York, NY: Routledge.
Google Scholar
McLendon, M. K., Hearn, J., Deaton, R. (2006). Called to account: Analyzing the origins and spread of state performance-accountability policies for higher education. Educational Evaluation and Policy Analysis, 28, 124.
Google Scholar | SAGE Journals | ISI
Meyer, B. D. (1995). Natural and quasi-experiments in economics. Journal of Business & Economic Statistics, 13, 151161.
Google Scholar | ISI
Miao, K. (2012). Performance-based funding of higher education: A detailed look at best practices in 6 states. Washington, DC: Center for American Progress. Retrieved from http://cdn.americanprogress.org/wp-content/uploads/issues/2012/08/pdf/performance_funding.pdf
Google Scholar
Mullin, C. M. (2012). Student success institutional and individual perspectives. Community College Review, 40, 126144.
Google Scholar | SAGE Journals
Offenstein, J., Shulock, N. (2010). Taking the next step: The promise of intermediate measures for meeting postsecondary completion goals (Jobs for the Future). Retrieved from http://www.jff.org/sites/default/files/publications/ATD_TakingtheNextStep_092810.pdf
Google Scholar
Pascarella, E. T., Terenzini, P. T. (2005). How college affects students: A third decade of research (1st ed.). San Francisco, CA: Jossey-Bass.
Google Scholar
Perna, L. (2010). Understanding the working college student: New research and its implications for policy and practice (Perna, L. , Ed.). Sterling, VA: Stylus. Retrieved from https://sty.presswarehouse.com/books/BookDetail.aspx?productID=217367
Google Scholar
Prince, D. (2013). Student achievement recommendation for including certificates. Olympia, WA: State Board for Community and Technical Colleges.
Google Scholar
Rabovsky, T. M. (2012). Accountability in higher education: Exploring impacts on state budgets and institutional spending patterns. Journal of Public Administration Research and Theory, 22, 675700.
Google Scholar | ISI
Radin, B. (2006). Challenging the performance movement: Accountability, complexity, and democratic values. Washington, DC: Georgetown University Press.
Google Scholar
Roksa, J. (2006). Does the vocational focus of community colleges hinder students’ educational attainment? The Review of Higher Education, 29, 499526.
Google Scholar | ISI
Sanford, T., Hunter, J. M. (2011). Impact of performance-funding on retention and graduation rates. Education Policy Analysis Archives, 19(33), 130.
Google Scholar
Seidman, A. (2005). College student retention: Formula for student success. Westport, CT: American Council on Education.
Google Scholar
Shadish, W. R., Cook, T. D. (1999). Comment-design rules: More steps toward a complete theory of quasi-experimentation. Statistical Science, 14, 294300.
Google Scholar
Shadish, W. R., Cook, T. D., Campbell, D. T. (2002). Experimental and quasi-experimental designs for generalized causal inference. Boston, MA: Houghton Mifflin.
Google Scholar
Shin, J. C., Milton, S. (2004). The effects of performance budgeting and funding programs on graduation rate in public four-year colleges and universities. Education Policy Analysis Archives, 12(22), 126.
Google Scholar
Shulock, N. (2011). Concerns about performance-based funding and ways that states are addressing the concerns. Sacramento, CA: Institute for Higher Education Leadership and Policy. Retrieved from http://www.csus.edu/ihelp/PDFs/B_performance%20funding_05-11.pdf
Google Scholar
State Board for Community and Technical Colleges . (2010). Growth in short-term certificates at Washington’s community and technical colleges (Research Report No. 10-3). Olympia, WA: Author.
Google Scholar
State Board for Community and Technical Colleges . (2012). Revised student achievement framework 2012. Olympia, WA: Author. Retrieved from http://www.sbctc.ctc.edu/college/_e-student-achievement-2012.aspx
Google Scholar
Tandberg, D., Hillman, N. (2014). State higher education performance funding: Data, outcomes and policy implications. Journal of Education Finance, 39, 222243.
Google Scholar
Tandberg, D., Hillman, N., Barakat, M. (2014). State higher education performance funding for community colleges: Diverse effects and policy implications. Teachers College Record, 116(12). Retrieved from http://www.tcrecord.org/Issue.asp?volyear=2014&number=12&volume=116
Google Scholar
Tebbs, J., Turner, S. (2005). Low-income students a caution about using data on Pell grant recipients. Change: The Magazine of Higher Learning, 37(4), 3443.
Google Scholar
Titus, M. A. (2006). Understanding college degree completion of students with low socioeconomic status: The influence of the institutional financial context. Research in Higher Education, 47, 371398.
Google Scholar | ISI
Volkwein, J. F. (2007). Assessing institutional effectiveness and connecting the pieces of a fragmented university. In Burke, J. (Ed.), Fixing the fragmented university (pp. 145180). Boston, MA: Anker.
Google Scholar
Volkwein, J. F., Tandberg, D. A. (2008). Measuring up: Examining the connections among state structural characteristics, regulatory practices, and performance. Research in Higher Education, 49, 180197.
Google Scholar | ISI

Access content

To read the fulltext, please use one of the options below to sign in or purchase access.
  • Access Options

    My Account

    Welcome
    You do not have access to this content.

    Chinese Institutions / 中国用户

    Click the button below for the full-text content

    请点击以下获取该全文

    Institutional Login

    Purchase Content

    24 hours online access to download content

    Added to Cart

    Cart is full

    There is currently no price available for this item in your region.

    Research off-campus without worrying about access issues. Find out about Lean Library here


Purchase

EPA-article-ppv for GBP29.00
EPA-article-ppv for $37.50
Single Issue 24 hour E-access for GBP128.71
Single Issue 24 hour E-access for $155.66