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State Appropriations and Employment at Higher Education Institutions

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  • Peter Hinrichs
Abstract
his paper studies the impacts of state appropriations on staffing and salaries at public higher education institutions in the United States using employment and revenue data from the Integrated Postsecondary Education Data System, along with an instrumental variables strategy borrowed from Deming and Walters (2018) and Chakrabarti, Gorton, and Lovenheim (2020). The instrument sidesteps the potential endogeneity of state appropriations for a given institution in a given year by interacting an institution’s historical reliance on state appropriations with total state appropriations for all higher education institutions in a given year. The results suggest that higher state appropriations are associated with an increase in tenure-track assistant professors at four-year institutions. They are also associated with an increase in part-time instructional staff at both four-year and two-year institutions. However, they are not associated with a change in the number of tenured faculty. Appropriations are also positively related to salaries for a variety of employee groups, although notably not for instructional staff who are instructors, lecturers, or without an academic rank. Overall, the results show that public higher education institutions use state appropriations in a variety of ways, but I do not find evidence that they replace contingent faculty with tenured or tenure-track faculty when appropriations rise.

Suggested Citation

  • Peter Hinrichs, 2022. "State Appropriations and Employment at Higher Education Institutions," Working Papers 22-32, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwq:95097
    DOI: 10.26509/frbc-wp-202232
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    References listed on IDEAS

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    1. Cook, Emily E. & Turner, Sarah, 2022. "Progressivity of pricing at US public universities," Economics of Education Review, Elsevier, vol. 88(C).
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    More about this item

    Keywords

    contingent faculty; state appropriations;

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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