In‐state tuition for the undocumented: Education effects on Mexican young adults

This paper examines the effect of tuition subsidy in the form of in‐state tuition to undocumented students on the education of noncitizen Mexican young adults. The policy is found to be associated with a 2.5 percentage point increase in college enrollment (base mean = 8%), a 3.7 percentage point increase in the proportion of students with at least some college education (base mean = 10%), and a 1.3 percentage point increase in the proportion with at least an associate degree (base mean = 4%). These results are robust to a variety of specifications. When the analysis is restricted to samples more likely to be affected by the policy, point estimates become larger. The study finds no evidence that in‐state tuition policy for the undocumented adversely affects the educational outcomes of natives. © 2008 by the Association for Public Policy Analysis and Management.     

Evaluating the Effects of Universal Place‐Based Scholarships on Student Outcomes: The Buffalo “Say Yes to Education” Program

A growing number of cities and states have been providing large tuition subsidies for residents through initiatives often called “place‐based” or “Promise” scholarship programs. We examine the effects of a prominent last‐dollar, place‐based scholarship program, Say Yes to Education in Buffalo, NY, on college matriculation and persistence. Employing a difference‐in‐differences strategy comparing changes across cohorts of students eligible and ineligible for large college scholarships, we find that scholarship eligibility is associated with an increase of 20 percent in the likelihood of matriculating into college within one year of graduation, and an increase in the likelihood of persistence into a second year of college of nearly 16 percent. Increases in matriculation are largely at four‐year institutions, where most of the additional funding from Say Yes is concentrated, exclusively at in‐state institutions, both public and private, and are largest at colleges with more selective admission rates. Finally, we see the largest increases in matriculation and persistence among students who attend high schools in the middle third of the poverty distribution. These results suggest that the additional aid provided by Say Yes plays an important role in increasing college matriculation and encouraging students to attend more selective schools.     

State and local pension plans' equity holdings and returns

This article explores recent trends in the size and performance of the equity investments of state and local pension plans. It also provides a context for the discussion about investing Social Security trust fund reserves in private equities. Equity holdings and returns for five of the largest private pension plans were compared with those of state and local pension plans. Key findings discussed in the article include: Equities were the largest investment in the aggregate portfolio of state and local pension plans in 1999 and represented 67 percent of the $3 trillion in aggregate state and local pension assets. Equity allocation of the five private plans resembled that of the aggregate. About 80 percent of state and local pension plan holdings were domestic equities in 1999. The five largest plans had about the same domestic/foreign allocation of equity investments during that same period. In 1999, state and local pension plans held about 11 percent of the U.S. equity market, which includes foreign equities held in the United States. State and local pension plans held about 10 percent of domestic equities in the U.S. equities market that same year. Returns on equity investments over a 10-year period were more than 17 percent for both private pensions and state and local pension plans. Although private plans tend to have slightly higher total returns, the difference stems from the higher equity asset allocation of the private pensions that were studied.     

Cities,Tax Revenues,and a State's Fiscal Future: The Value of Major Urban Centers

Competition among core cities or urban centers and suburban and rural areas besets numerous states. The competition often occurs amid a political environment in which suburban and rural areas enjoy a political majority in the state legislature, a majority that directs state investments to their areas. With Ohio as a case study, the issues that have created the urban–suburban–rural trichotomy are reviewed and an analysis of the tax returns, by area, to state investments is presented. The findings illustrate that urban centers produce more tax dollars per dollar of state investment than other areas, implying that state underinvestment in urban areas harms overall state tax revenues.     

Financial aid and for‐profit colleges: Does aid encourage entry?

Concerns over rising college tuition and slow economic growth have brought renewed attention to the role of federal and state financial aid programs in opening access to education. Despite a large body of literature examining the effects of grant aid on four‐year and public two‐year college enrollment, for‐profit colleges—particularly the vast majority that offer two‐year degrees and certificates—have largely been ignored. Using panel data methods and a new administrative data set of for‐profit colleges operating in California between 1989 and 2003, I assess the impact of the federal Pell Grant program, the G.I. Bill, and California's Cal Grant program on the net number of for‐profit colleges per county. The results suggest that for both Pell and Cal Grants, increases in the per‐student maximum award encourage for‐profit entry. This relationship is particularly strong in counties with high adult poverty levels, where more students are eligible for aid. Further, these gains in the private sector do not appear to come at the expense of the public sector. Rather, public community colleges also experience enrollment gains as the generosity of Pell and Cal Grants increases, although this reaction appears to be weaker than the reaction of for‐profits. © 2010 by the Association for Public Policy Analysis and Management.     

Parental schooling choice: A case study of minnesota

Public support of nonpublic elementary and secondary education has become one of the most controversial issues in American educational policy, with tuition tax credits and deductions subjects of ongoing debate at both the state and federal level. This article presents the results of one of the first empirical investigations of how a tax subsidy for tuition costs actually influences parents' school choices using data from Minnesota, the first state to have a tuition subsidy pass judicial review at all levels. It should be uyseful to policy makers, researchers, adn practitioners who are concerned with how parents make schooling decisions on behalf of their children, and how tax subsidies for educational expenses might affect those choices.     

Does retirement education teach people to save pension distributions?

As defined contribution pension plans have become increasingly common over the past two decades, so have lump sum distributions from those plans. Employees who elect such a distribution take the balance of their pension account with them when they leave a job. They can then choose to maintain the funds in accounts designated for retirement, invest them in other saving vehicles, or spend them. If spent pension distributions are not replaced by other savings, however, the future elderly are unlikely to be able to maintain a desirable standard of living. With employee-funded pensions expected to play an increasingly important role in financing Americans' retirement, saving these funds in essential. This article is the first to examine the relationship between retirement education--specifically, meetings sponsored by employers or by public and private institutions--and the saving of lump sum distributions. Two definitions of saving are used: one that includes reinvestment only in tax-deferred saving vehicles, and a broader one that includes tax-deferred vehicles, general saving vehicles (stocks, bonds, savings accounts, and so on), and paying off debt. The analysis also evaluates the effects of retirement education on specific groups identified in previous research as being less likely to keep their pension distributions in tax-deferred accounts: namely, women, younger persons, and persons with less than a college education. The same groups tend to be less financially secure in retirement, making the effects of retirement education on them particularly relevant. With an econometric model using ordinary least squares and data from the 1992 Health and Retirement Study, the analysis finds that retirement education does not affect the overall likelihood that employees will save their distributions, whether in tax-deferred or non-tax-deferred vehicles. The picture is more complicated for subgroups of employees. Attending a retirement meeting is associated with an increased likelihood of saving among persons age 40 and under but a decreased probability of saving among college graduates and women. No effect was found for men, individuals over age 40, or persons who did not graduate from college. The finding that retirement education increases the likelihood of younger persons' saving a distribution is reassuring, for these workers are America's future retirees. However, the finding that attending a meeting does not increase saving among some of the most financially vulnerable groups is a matter of concern to policymakers. Further study of the long-term effects of spending pension distributions is needed.     

Old Ideas and New Investments: Divergent Pathways to a Knowledge Economy in Denmark and Finland

This article identifies and explains two very different pathways to a knowledge economy, based on investment in training in Denmark and research in Finland. The fact that these ostensibly similar countries have pursued such divergent strategies cannot be explained using the established literature on employer organization, labor power resources, and small states. This article develops and resolves this puzzle by focusing on the interaction among organized actors. It argues that nineteenth‐century economic and geopolitical challenges generated two distinctive and enduring collective responses based on industry–labor cooperation in Denmark and state–industry cooperation in Finland. Those coalitions continue to shape the twenty‐first‐century experimentation, supporting investment in continuing education in Denmark and technological innovation in Finland. In explaining these differences, this article not only identifies an enduring and constructive role for strategic cooperation but also explains how it varies among ostensibly similar coordinated economies.     

Education finance reform: A dynamic perspective

We use a dynamic Tiebout model to analyze the consequences of moving from a pure local system of education finance to a pure state system of finance in which each student receives the same resources. While much of the education finance literature focuses on the static or immediate effects of such a change, our analysis also examines the dynamic effects. Numerical simulations for a calibrated version of our model indicate that these dynamic effects are very important. Comparing steady states, we find that aggregate welfare increases on the order of 10 percent following the switch to a state system. The key to this welfare gain is that a local system yields inefficiently low investment in human capital of children from low-income families.     

The impact of consumer advocates on regulatory policy in the electric utility sector

We examine the effect of consumer advocate participation in administrative procedures on regulatory policy. We use a unique panel database of rate reviews conducted for US electric utilities from 1980 to 2007 to assess how state consumer advocates affect Public Utility Commission decisions on utilities’ allowed financial returns and rate structures. We find first that utilities experience fewer rate reviews in states with consumer advocates, consistent with utilities strategically postponing requests for rate increases. Second, after controlling for observed and unobserved state characteristics, we find that PUCs in states with consumer advocates permit returns on equity that are on average 0.45 percentage points lower than states without advocates—equivalent to a $7.9 million (3.7 %) reduction in average utility operating income, all else equal. Third, consumer advocates are associated with lower residential rates relative to other customer classes. Our findings provide statistical support for the thesis that institutionalizing interest group representation in administrative procedures is one way for legislatures indirectly to influence agency-determined policies.     

Subsidizing the affluent: the case of medical education.

State and federal funds are important sources of revenue for medical schools, and a strong case can be made for public support for these institutions. Although the federal role is more widely known, the states in fact provide the bulk of direct support for medical training. The nature of aid from the two sources differs in significant ways. Most federal aid supports research or patient care, but much of state aid goes to support unconditional tuition subsidies. The primary beneficiaries of these subsidies are relatively affluent nonminority students who are beginning lucrative careers in the medical field--careers that would be lucrative even if no subsidies were provided. Nor does it appear that general subsidies are needed to attract poor and minority applicants. While targeted loans and scholarships to individuals may be justified, general tuition subsidies are not.     

U.S. State Budget Directors: Characteristics, Experience, and Attitudes

Much literature exists on state government budgeting, but until now, none existed on state budget directors. This article reports on a survey of these individuals. Their ages, genders, race, education, and work experience are reported. Their work week is discussed in terms of number of hours worked and interactions with their staff, the governor, and the legislature. Attitudes about the job and about their personal lives as related to their jobs are discussed. Their plans for when they leave office are considered. The characteristics and attitudes of the directors are compared with data about their respective states in search of possible linkages.     

FEDERAL-STATE RELATIONS IN THE IMPLEMENTATION OF SURFACE MINING POLICY

The federal Surface Mining Control and Reclamation Act of 1977 not only established national performance standards and permitting procedures for the coal industry, but also provided for stateprimacy. The principle of state primary is both simple and intuitively appealing: Because states do not have adequate resources to develop effective regulatory programs, the federal government would set up comprehensive procedures and criteria to guide the states in preparing their own plans. The obvious advantage of state primacy is that i t provides for flexibility in implementation.
Ultimately, state primacy is an experiment in cooperative federalism, a sharing of authority and responsibility between the states and the federal government to insure both the general welfare and sensitivity to local conditions. The history of surface mining regulation is instructive because i t points out the pitfalls and promise of cooperative federalism as well as the critical role of the courts in making state primacy work.     

Points for Place: Can State Governments Shape Siting Patterns of Low-Income Housing Tax Credit Developments?

There is considerable controversy about the allocation of Low-Income Housing Tax Credits (LIHTC). Some charge that credits are disproportionately allocated to developments in poor, minority neighborhoods without additional investments and thereby reinforcing patterns of poverty concentration and racial segregation. We examine whether Qualified Allocation Plans, which outline the selection criteria states use when awarding credits, can serve as an effective tool for directing credits to higher opportunity neighborhoods (or neighborhoods that offer a rich set of resources, such as high-performing schools and access to jobs) for states wishing to do so. To answer this question, we study changes in the location criteria outlined in allocation plans for 20 different states across the country between 2002 and 2010, and observe the degree to which those modifications are associated with changes in the poverty rates and racial composition of the neighborhoods where developments awarded tax credits are located. We find evidence that changes to allocation plans that prioritize higher opportunity neighborhoods are associated with increases in the share of credits allocated to housing units in lower poverty neighborhoods and reductions in the share allocated to those in predominantly minority neighborhoods. This analysis provides the first source of empirical evidence that state allocation plans can shape LIHTC siting patterns.     

Institutions, Policy Innovation, and E-Government in the American States

Examining the rankings of American states in one fast‐growing policy area, e‐government, states with the most sophisticated and comprehensive policies varied over a five‐year period. What factors account for change in digital government policy innovation over time? Using time‐series analysis and 50‐state data, the authors find that state institutional capacity is important for continued innovation. They also find an association between reinvention in state governments and the institutionalization of information technology, suggesting a more general orientation toward government reform and modernization. Although state wealth and education were not significant in previous studies, they emerge as predictors of later innovation. The theoretical contribution of this study is to better understand the dynamic character of innovation over time and the role of institutions. The link between reinvention and e‐government raises the possibility that the modernization of state institutions generally facilitates innovation.     

Education,identity, and community: lessons from Jewish emancipation

Why do some minority communities take up opportunities for education while others reject them? To shed light on this, we study the impact of Jewish Emancipation in nineteenth century Europe on patterns of education. In Germany, non-religious and Reform Jews dramatically increased their rates of education. In the less developed parts of Eastern Europe, Orthodox and ultra-Orthodox communities imposed unprecedented restrictions on secular education and isolated themselves from society. Explaining this bifurcation requires a model of education that is different from the standard human capital approach. In our model, education not only confers economic benefits but also transmits values that undermine the cultural identity of minority groups. We show that it is individually rational for agents who benefit least from rising returns to education to respond by reducing their investment in education. Group-level sanctions for high levels of education piggyback upon this effect and amplify it.     

State‐Funded College Scholarships: General Definitions and Characteristics

State‐funded scholarship programs are transforming the way citizens and policymakers think about higher education. Advocates see these programs as a remedy to problems facing the state workforce such as “brain drain” and “unequal opportunity” for a sound education. Opponents see low retention rates and the number of already‐privileged students receiving benefits as signs that these programs are not reaching their maximum potential. This article traces the development of state‐funded college scholarships from earlier need‐based programs to current merit‐based programs and outlines current debates on policy effectiveness. Currently, 14 states have a state‐funded scholarship program. Differences between programs revolve around the political and economic circumstances of each state.     

Road to Ruin? A Spatial Analysis of State Highway Spending

Do states engage in infrastructure expenditure competition to attract new economic activity? Economic theory is inconclusive on the matter. States might respond to increased infrastructure spending in competitor states by increasing their own infrastructure spending. Conversely, states may decrease spending in the presence of positive spillovers from competitor states' infrastructure investment. Using spatial econometric techniques and focusing specifically on highway spending, we demonstrate that states expend less on highways when spending in neighboring states increases. We explore this possibility further by modeling state personal income growth as a function of own‐state and neighbor‐state highway spending. Our findings suggest positive spillovers influence interstate relationships for highway spending rather than race‐to‐the‐top competition for economic activity.     

Differential Pricing in Undergraduate Education: Effects on Degree Production by Field

In the face of declining state support, many universities have introduced differential pricing by undergraduate program as an alternative to across‐the‐board tuition increases. This practice aligns price more closely with instructional costs and students’ ability to pay postgraduation. Exploiting the staggered adoption of these policies across universities, this paper finds that differential pricing does alter the share of students studying engineering and possibly business. There is some evidence that student groups already underrepresented in certain fields are particularly affected by the new pricing policies. Price does appear to be a policy lever through which state governments can alter the allocation of students to majors and thus the field composition of the workforce.     

Potential State Government Practices Impact of the New GASB Accounting Standard for Retiree Health Benefits

The Governmental Accounting Standards Board (GASB) has adopted a new accounting standard for state and local government retiree healthcare benefits that, for many states, will require accrual accounting for such benefits for the first time. The purpose of this paper is to examine the recent reporting practices of state governments with respect to retiree health insurance programs sponsored by the states in order to determine the dimensions of potential state employer practices likely to be changed by the new Other Postemployment Benefits (OPEB) standard with respect to accounting for such state plans, as well as financing and offering such state plans.