Decomposing financial inequality across U.S. higher education institutions

Abstract

The level of financial inequality among U.S. higher education institutions has important implications for students and society, yet few scholars have examined this topic using established methods for measuring inequality. This paper updates and extends previous work while introducing decompositions that shed light into key trends that we observed for the 2004–2017 period: increasing inequality in total expenditures and decreasing inequality in per-student expenditures. The results of our decomposition highlight how these opposing trends related to rising differences in enrollments and an increasingly positive correlation between an institution's enrollment level and its expenditures per student. Our decomposition results also show that both between-group differences and within-group differences contributed to the observed trends. Further examination of within-group differences reveals that inequality patterns differed meaningfully by institutional type, with doctoral universities and private baccalaureate colleges possessing higher levels of inequality and a more positive correlation between per-student expenditures and enrollments than master's institutions and public associate's colleges.