State Spending on Higher Education: Testing the Balance Wheel over Time

By Jennifer A. Delaney, William R. Doyle. Journal of Education Finance, 2011

162 citations recorded by the source corpus.

This article considers the role of higher education in state budgets. It empirically models and tests the balance wheel hypothesis in a robust framework. The balance wheel model posits that in good economic times, higher education is an attractive area for states to fund and tends to be funded at a higher rate than other state budget categories. In bad economic times, the reverse is true. Higher education is often one of the first state budget categories to be cut, and it is cut more than other state budget categories due in part to its ability to raise outside revenue by charging tuition. This article expands upon previous work on the non-linear balance wheel model by including extensive controls for the economic, political, and higher education characteristics of each state. It finds evidence, robust to alternative specifications, of the balance wheel model over the time period from 1985–2004.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/870a0400704313bc096b8b3d78bcefe302477f65

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Citations in the corpus

Creating the Out-of-State University: Do Public Universities Increase Nonresident Freshman Enrollment in Response to Declining State Appropriations? (2015, background): “2003; Toutkoushian and Hollis 1998; Weerts and Ronca 2012), often more so than other state budget items (Delaney and Doyle 2011).”
The Impact of Price Caps and Spending Cuts on U.S. Postsecondary Attainment (2017, unknown): “Nearly all states have some sort of balanced budget requirement, and higher education spending often serves as the “balance wheel” used to meet these requirements when tax revenues fall short of projections (Kane et al., 2003; Delaney and Doyle, 2011; Barr and Turner, 2013).”