Equity Measures in Higher Education Performance-Based Funding Systems: Building a Typology, Exploring Policy Adoptions, and Evaluating Policy Impacts

Performance-based funding (PBF) policies that closely link higher education funding to performance metrics are common in the United States. Similar to other performance management systems, evidence suggests PBF policies have unintended impacts, such as cream-skimming. More specifically, evidence shows the fiscal incentives of PBF encourage institutions to enroll students who have the highest probabilities of success, thereby limiting access to higher education for certain student populations. To counteract perverse enrollment incentives, some states include equity measures in their PBF formulas. Equity measures are components of PBF policies that serve to counteract the incentives to increase selectivity in the admissions process. These equity measures provide additional weight in the state funding formula for targeted groups' performance. The first chapter of this dissertation provides a conceptual step forward by building a theory-driven typology of PBF equity measures. Findings show that states favor equity measures that target socioeconomic status rather than socio-demographic characteristics, although results vary by sector. The second chapter treats this typology as a set of competing policy options available to states. I utilize a Cox proportional hazards model to estimate the likelihood of states' adoptions of PBF with and without equity measures. The results suggest that common policy adoption predictors have differential impacts on states' choices among competing policy options. Moreover, the political affiliation of state leadership, diversity in the state legislature, and HBCU representation may influence which type of policy states adopt among competing policy options. The final chapter uses a dynamic difference-in-differences estimator to test the impact of PBF equity measures on enrollments of Black, Hispanic/Latina, and low-income students at four-year institutions. Results show that PBF equity measures do not mitigate the cream-skimming admissions practices that reduce enrollments of low-income and underrepresented minority students. Taken together, the chapters in this dissertation offer theoretical and policy-relevant contributions. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com/en-US/products/dissertations/individuals.shtml.]