Do Expenditures Other than Instructional Expenditures Affect Graduation and Persistence Rates in American Higher Education

32 Pages Posted: 18 Aug 2009 Last revised: 29 Jan 2023

See all articles by Douglas A. Webber

Douglas A. Webber

Temple University - Department of Economics

Ronald G. Ehrenberg

ILR-Cornell University; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Date Written: August 2009

Abstract

During the last two decades, median instructional spending per full-time equivalent (FTE) student at American 4-year colleges and universities has grown at a slower rate than median spending per FTE student in a number of other expenditure categories including academic support, student services and research. Our paper uses institutional level panel data and a variety of econometric approaches, including unconditional quantile regression methods, to analyze whether these non instructional expenditure categories influence graduation and first-year persistence rates of undergraduate students.Our most important finding is that student service expenditures influence graduation and persistence rates and their marginal effects are higher for students at institutions with lower entrance test scores and higher Pell Grant expenditures per student. Put another way, their effects are largest at institutions that have lower current graduation and first year persistence rates. Simulations suggest that reallocating some funding from instruction to student services may enhance persistence and graduation rates at those institutions whose rates are currently below the medians in the sample.

Suggested Citation

Webber, Douglas A. and Ehrenberg, Ronald G., Do Expenditures Other than Instructional Expenditures Affect Graduation and Persistence Rates in American Higher Education (August 2009). NBER Working Paper No. w15216, Available at SSRN: https://ssrn.com/abstract=1454932

Douglas A. Webber

Temple University - Department of Economics ( email )

Philadelphia, PA 19122
United States

Ronald G. Ehrenberg (Contact Author)

ILR-Cornell University ( email )

Higher Education Research Institute
Ithaca, NY 14853-3901
United States
607-255-3026 (Phone)
607-255-4496 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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