Outmigration and State and Local Appropriations for Public Higher Education

Robert R Dunn

doi:10.52324/001c.8054

Abstract

This paper focuses on the role of outmigration in determining public higher education funding from the 1993-1994 to the 2011-2012 academic years. The results of a fixed-effects estimation show that outmigration has a statistically significant and negative effect on the level of state funding when controlling for various state indicators, but the impact varies across state recessions and expansions. Findings on the role of state business cycles provide updated estimates of the relationship between migration and education funding but are generally in line with previous research.

Highlights

For the 2011-2012 school year, state and local appropriations accounted for more than 20 percent of public higher education total revenues and nearly 60 percent of non-operating revenues (NCES, Digest for Education Statistics)
Where app is real state and local appropriations to public higher education per full-time equivalent (FTE) student, outmig is total state outmigration as a percent of state population, outagi is real adjusted gross income per out-migrant, inc is real personal per capita income, rev is real total state and local revenue per capita, enroll is total FTE enrollment in public higher education, uemp is the ratio of the state unemployment rate to the national unemployment rate, age is median age, edu is percent of the population with at least a bachelor’s degree, priv is the percent of students enrolled in private higher education institutions, and rep is a dummy variable equal to one if the state legislature and governor’s office are controlled by Republicans
In keeping with previous work in the area, Strathman (1994) and more recently Rizzo (2006), the rate of outmigration has a negative relationship with state and local appropriations per FTE student that is significant at the one percent level as shown in the Model 1 results

Summary

INTRODUCTION

For the 2011-2012 school year, state and local appropriations accounted for more than 20 percent of public higher education total revenues and nearly 60 percent of non-operating revenues (NCES, Digest for Education Statistics). Tuition and fees at public institutions of higher education have increased steadily as universities are forced to raise greater amounts of revenue to balance budgets.1 These trends make the examination of public higher education funding all the more timely. Adjusted gross income (AGI) per out-migrant has a statistically significant relationship with appropriations per FTE student which provides evidence that outmigration could reduce the amount of revenue available for public higher education funding, the economic magnitude is relatively small. The findings here provide new, more detailed information about a relationship between outmigration and public higher education funding and confirm the importance of state economic conditions, as measured primarily by income per capita and state and local revenue per capita, in the decision making process

LITERATURE REVIEW

DATA AND METHODOLOGY

ESTIMATION RESULTS

CONCLUSION