Performance Funding and Historically Black Colleges and Universities: An Assessment of Financial Incentives and Baccalaureate Degree Production

Abstract

Pay-for-performance has become a state finance policy du jour for public postsecondary institutions. A total of 35 states currently distribute varying amounts of appropriations to colleges and universities based on outcome measures. This study uses a difference-in-differences quasi-experimental technique to assess the impact of performance-based funding on public 4-year Historically Black Colleges and Universities (HBCUs). It also includes separate analyses on the older and newer models of performance funding throughout the United States. This study finds little evidence of a significant effect on improvement in baccalaureate degree attainment in public 4-year HBCUs that receive some apportionment of state appropriations through performance-based funding.