Institutional Affiliation: Stanford University
|Did the Fiscal Stimulus Work for Universities?|
with Michael F. Dinerstein, Caroline M. Hoxby, Jonathan Meer
in How the Financial Crisis and Great Recession Affected Higher Education, Jeffrey R. Brown and Caroline M. Hoxby, editors
We investigate how stimulus-motivated federal funding directed to universities affected their revenues, expenditures, employment, tuition, student aid, endowment spending, and receipt of state government appropriations. We also investigate how these funds affected the economies of the counties in which the institutions are located. To overcome the potential endogeneity of federal funds (for instance, federal student aid rising when students become poorer), we employ: (i) an instrument that applies nation-wide rates of increase in research funding by agency to universities whose initial dependence on these agencies differs; and (ii) an instrument that applies the change in the maximum Pell Grant to institutions with varying initial numbers of students eligible for the maximum grant. Our res...