Performance Funding in Higher Education: Do Financial Incentives Impact College Completions?

Hillman, Nicholas; Tandberg, David A.; Gross, Jacob P. K.

doi:10.1080/00221546.2014.11777349

Cited by 60 publications

(94 citation statements)

References 27 publications

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“…Public policy aims for institutional accountability, and performance-based funding is an important mechanism to motivate institutions. The effectiveness of performance-based funding is limited in many countries, however, because public funding comprises only a small portion of total funding [1]. It is thus interesting to analyze the case of Finland, which has adopted performance-based funding and does not have tuition fees.…”

Section: Introductionmentioning

confidence: 99%

The Performance-Based Funding Scheme of Higher Education Institutions

Kettunen¹

2015

IJLT

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The purpose of this study is to assess the new performance-based funding scheme of the Finnish universities of applied sciences. In many countries, such schemes have largely failed and have been uneven and unstable. The results of this study indicate that, in Finland, the funding scheme has improved the graduation rates, especially among male students. This study proposes the use of the balanced scorecard approach to improve the funding scheme. The learning and growth perspective of the balanced scorecard is non-existent in the Finnish scheme, which means that the funding scheme does not include the research and teaching skills necessary to achieve efficient and effective processes and high quality. Moreover, the funding scheme does not include the funding of education, which is important in market-oriented education. The research findings of this study are useful for those who want to modify the funding scheme so that all the necessary indicators are incorporated in the improved scheme.

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Section: Introductionmentioning

confidence: 99%

The Performance-Based Funding Scheme of Higher Education Institutions

Kettunen¹

2015

IJLT

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“…Kelchen (2018), using the same methodology, finds no significant effect of formula financing on underrepresented student enrollment in 4year public colleges. Hillman et al (2014) find no effect of the reform on college completion rate in Pennsylvania state. Umbricht et al (2017) use difference-in-differences and find no increase in the number of graduates in Indiana due to the introduction of PBF.…”

Section: Effects Of Performance-based Funding Mechanismsmentioning

confidence: 68%

“…The principal-agent conceptual framework similar to the one presented in this section has been already used in the context of analysis of PBF in higher education, e.g. in (Hillman et al, 2014; where the authors study the effects of performance-based funding in Pennsylvania and Washington respectively.…”

Section: Insert [Figure 1] Around Herementioning

confidence: 99%

The Causal Impact Of Performance-Based Funding On University Performance: Quasi-Experimental Evidence From A Policy In Russian Higher Education

et al. 2019

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In most countries which experience structural transformation of their higher education system, a crucial goal of policy makers is to tie the amount of university public funding to their performance. This research analyzes the Russian performance-based funding (PBF) reform to provide a quasi-experimental assessment of its effects on Russian universities' performance. Data comes from the Monitoring for HEIs performance and covers the period between 2014/2015 and 2017/2018. To evaluate the causal effect of the PBF policy on university performance, in a first step we define the treatment and the control groups by distinguishing universities on the basis of the trend in their performance-based allocations. In a second step, we estimated the causal effect of the redistribution of public funds across universities as a result of PBF policy. Results indicate that the performance of universities is actually affected by getting extra funding after the reform, although heterogeneity is at play. The short-run effect is related with the impact on average national exam scores, indicating that the policy forced universities to be more selective.JEL Classification: I22, I23, I28

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“…The motivating concern is similar—to hold state institutions accountable for students who drop out or who have poor employment outcomes post‐graduation—by tying state resources directly to outcomes. Most of the evaluations of PBF suggest limited effects on student outcomes (see Dougherty et al., ; Hillman, Tandberg, & Fryar, ; Hillman, Tandberg, & Gross, ; Rabovsky, ; Rutherford & Rabovsky, ; Tandberg & Hillman, ). However, PBF has limited student admissions from disadvantaged backgrounds (Dougherty et al., ; Lahr et al., ).…”

Section: Comparison Of Students Across Degree Level and Sectormentioning

confidence: 99%