Skip to main content

Advertisement

SpringerLink
Log in

Market-Based Higher Education: Does Colorado’s Voucher Model Improve Higher Education Access and Efficiency?

  • Published:
Research in Higher Education Aims and scope Submit manuscript

Abstract

In 2004, Colorado introduced the nation’s first voucher model for financing public higher education. With state appropriations now allocated to students, rather than institutions, state officials expect this model to create cost efficiencies while also expanding college access. Using difference-in-difference regression analysis, we find limited evidence that these outcomes occurred within the 4-year sector; however, the policy increased cost efficiencies among community college and reduced college access for some underrepresented groups. The paper discusses the challenges of applying market-based reforms to public higher education.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

Notes

  1. In 2005 the CO voters passed are five year hiatus from the TEL restrictions and eliminated the ratchet effect (Watkins, 2009).

  2. According to data from the National Center for Education Statistics, there were nearly 4,500 postsecondary degree-granting institutions in 2009–2010. It is important to acknowledge the diversity of institutional types and missions when making broad generalizations about a higher education marketplace.

References

  • Alexander, F. K. (2000). The changing face of accountability: Monitoring and assessing institutional performance in higher education. Journal of Higher Education, 71(4), 411–431.

    Google Scholar 

  • Archibald, R. B., & Feldman, D. (2006). State higher education spending and the tax revolt. The Journal of Higher Education, 77(4), 618–644.

    Article  Google Scholar 

  • Archibald, R. B., & Feldman, D. H. (2011). Why does college cost so much? Oxford: Oxford University Press.

  • Bailey, T., Calcagno, J. C., Jenkins, D., Kienzl, G., & Leinbach, T. (2005). The effects of institutional factors on the success of community college students. New York: Community College Research Center, Teachers College, Columbia University.

    Google Scholar 

  • Barrow, L., & Rouse, C. (2008). School vouchers: Recent findings and unanswered questions. Journal of Economic Perspectives, 32(3), 2–16.

    Google Scholar 

  • Baumol, W. J. (1993). Health care, education and the cost disease: A looming crisis for public choice. Public Choice, 77(1), 17–28.

    Article  Google Scholar 

  • Becker, W. (1990). The demand for higher education. In S. Hoenack & E. Collins (Eds.), The economics of American universities: Management, operations, and fiscal environment (pp. 155–188). New York: SUNY.

    Google Scholar 

  • Bell Policy Center. (2003). Ten years of tabor: A study of Colorado’s taxpayer’s bill of rights. Denver, CO: Bell Policy Center.

    Google Scholar 

  • Berry, F. S., & Berry, W. D. (1990). State lottery adoptions as policy innovations: An event history analysis. The American Political Science Review, 84(2), 395–415.

    Google Scholar 

  • Blundell, R., & Costa Dias, M. (2000). Evaluation methods for non-experimental data. Fiscal Studies, 21(4), 427–468.

    Article  Google Scholar 

  • Bowen, W. G., Chingos, M. M., & McPherson, M. S. (2009). Crossing the finish line. Princeton, NJ: Princeton University Press.

    Google Scholar 

  • Brewer, D., Gates, S., & Goldman, C. (2002). In pursuit of prestige. RAND Corporation.

  • Cameron, K. (1978). Measuring organizational effectiveness in institutions of higher education. Administrative Science Quarterly, 23(4), 604–632.

    Google Scholar 

  • Camou, M., & Patton, W. (2012). Deregulation and higher education: Potential impact on access, affordability, and achievement in Ohio. Policy Matters Ohio.

  • Chubb, J. E., & Moe, T. M. (1990). Politics, markets, and America’s schools. Washington: Brookings Institution Press.

  • Clotfelter, C. T. (1992). Explaining the demand. In C. Clotfelter, R. Ehrenberg, M. Getz, & J. Siegfried (Eds.), Economic challenges in higher education (pp. 59–88). Chicago: University of Chicago Press.

    Google Scholar 

  • College Board. (2012). Total federal, institutional, private and employer, and state grants over time. Trends in Higher Education. Retrieved December 31, 2013 from https://trends.collegeboard.org/student-aid/figures-tables/growth-federal-institutional-private-and-employer-and-state-grants-over-time.

  • Colorado Commission on Higher Education. (2008). College opportunity fund status report FY07-08. Denver, CO: Colorado Commission on Higher Education.

    Google Scholar 

  • Colorado Office of the State Auditor. (2012). Performance audit of the implementation of the college opportunity fund program (no. 2162) (p. 58). Denver, CO: State of Colorado, Office of the State Auditor.

  • Cook, T. D., & Campbell, D. T. (1986). The causal assumptions of quasi-experimental practice. Synthese, 68(1), 141–180.

    Google Scholar 

  • Creedy, J. (1994). Financing higher education: Public choice and social welfare. Fiscal Studies, 15(3), 87–108.

    Article  Google Scholar 

  • Delaney, J. A., & Doyle, W. R. (2011). State spending on higher education: Testing the balance wheel over time. Journal of Education Finance, 36(4), 343–368.

    Google Scholar 

  • Deller, S., Stallmann, J. I., & Amiel, L. (2012). The impact of state and local tax and expenditure limitations on state economic growth. Growth and Change, 43(1), 56–84.

    Google Scholar 

  • Desrochers, D., Lenihan, C., & Wellman, J. (2010). Trends in college spending, 1998–2008. Delta project on postsecondary education costs, productivity, and accountability.

  • Dill, D. D. (2003). Allowing the market to rule: The case of the United States. Higher Education Quarterly, 57(2), 136–157.

    Article  Google Scholar 

  • Dolan, R., & Schmidt, R. (1994). Modeling institutional production of higher education. Economics of Education Review, 13, 197–213.

    Article  Google Scholar 

  • Dougherty, K. J., Natow, R. S., & Vega, B. E. (2012). Popular but unstable: Explaining why state performance funding systems in the United States often do not persist. Teachers College Record, 114(3), 1–41.

    Google Scholar 

  • Drukker, D. M. (2003). Testing for serial correlation in linear panel-data models. Stata Journal, 3(2), 168–177.

    Google Scholar 

  • Dynarski, S. (2000). Hope for whom? Financial aid for the middle class and its impact on college attendance (Working paper no. 7756). National Bureau of Economic Research.

  • Dynarski, S. M. (2003). Does aid matter? Measuring the effect of student aid on college attendance and completion. American Economic Review, 93(1), 279–288.

    Article  Google Scholar 

  • Fischer, K. (2005, July 8). In Colorado, a new voucherlike program offers promise and perils to colleges and students. The Chronicle of Higher Education. Retrieved from http://chronicle.com/article/In-Colorado-a-New-Voucherlike/121483/.

  • Flores, S. (2010). The First State Dream Act: In-state resident tuition and immigration in Texas. Educational Evaluation and Policy Analysis, 32(4), 435–455.

    Article  Google Scholar 

  • Friedman, M. (1962). Capitalism and freedom. Chicago: University of Chicago Press.

  • Fryar, A. H. (2012). What do we mean by privatization in higher education? In J. C. Smart & M. B. Paulsen (Eds.), Higher education: Handbook of theory and research (Vol. 27, pp. 521–547). Dordrecht: Springer.

  • Gerald, D., & Haycock, K. (2006). Engines of inequality: Diminishing equity in the nation’s premier public universities (pp. 1–25). Education Trust.

  • Glover, D., & Levacic, R. (2007). Educational resource management: An international perspective. Institute of Education-London. 20 Bedford Way, London, WC1H 0AL, UK.

  • Goldrick-Rab, S., Harris, D. N., & Trostel, P. A. (2009). Why financial aid matters (or does not) for college success: Toward a new interdisciplinary perspective. In Higher Education: Handbook of Theory and Research, Vol. 24, pp. 1–45.

  • Greene, W. H. (2011). Econometric analysis, 7th Ed. New Jersey: Prentice Hall.

  • Hamilton, R. (2011). Who’s behind proposed reforms to Texas higher Ed? Texas: The Texas Tribune.

  • Harbour, C. P., Davies, T. G., & Lewis, C. W. (2006). Colorado’s voucher legislation and the consequences for community colleges. Community College Review, 33(3–4), 1–18.

    Article  Google Scholar 

  • Heller, D. E. (1999). The effects of tuition and state financial aid on public college enrollment. The Review of Higher Education, 23(1), 65–89.

    Article  Google Scholar 

  • Heller, D. E. (2000). Tuition pricing and higher education participation in Colorado. Olympia, WA: Northwest Education Research Center.

    Google Scholar 

  • Hemelt, S. W., & Marcotte, D. E. (2011). The impact of tuition increases on enrollment at public colleges and universities. Educational Evaluation and Policy Analysis, 33(4), 435–457.

    Google Scholar 

  • Hovey, H. A. (1999). State spending for higher education in the next decade: The battle to sustain current support. San Jose, CA: National Center for Public Policy and Higher Education.

  • James, F. J., & Wallis, A. (2004). Tax and spending limits in Colorado. Public Budgeting & Finance, 24(4), 16–33.

    Article  Google Scholar 

  • Johnstone, D. B. (2001). Higher education and those “Out of Control Costs”. In P. G. Altbach, P. J. Gumport, & D. B. Johnstone (Eds.), In defense of American higher education (pp. 144–180). Baltimore, MD: Johns Hopkins University Press.

  • Johnstone, D. B. (2004). The economics and politics of cost sharing in higher education: Comparative perspectives. Economics of Education Review, 23(4), 403–410.

    Article  Google Scholar 

  • Jongbloed, B. (2004). Regulation and competition in higher education. In P. Teixeira, B. Jongbloed, D. Dill & A. Amaral (Eds.), Markets in higer education: Rhetoric or reality? (Vol. 6, pp. 87–111). Dordrecht: Springer.

  • Kane, T. (1996). Lessons from the largest school voucher program ever: Two decades of experience with pell grants. In B. Fuller, R. Elmore, & G. Orfield (Eds.), Who chooses? Who loses? Culture, institutions, and the unequal effects of school choice. New York, NY: Teachers College Press.

    Google Scholar 

  • Karch, A. (2007). Emerging issues and future directions in state policy diffusion research. State Politics & Policy Quarterly, 7(1), 54–80.

    Article  Google Scholar 

  • Levin, H. M. (1992). Market approaches to education: vouchers and school choice. Economics of Education Review, 11(4), 279–285.

    Article  Google Scholar 

  • Lindsay, A. W. (1982). Institutional performance in higher education: The efficiency dimension. Review of Educational Research, 52(2), 175–199.

    Article  Google Scholar 

  • Long, B. T., & Kurlaender, M. (2009). Do community colleges provide a viable pathway to a baccalaureate degree? Educational Evaluation and Policy Analysis, 31(1), 30–53.

    Article  Google Scholar 

  • Martin, R. E. (2005). Cost control, college access, and competition in higher education. Cheltenham: Edward Elgar Publishing.

  • McLendon, M., & Cohen-Vogel, L. (2008). Understanding education policy change in the American States: Lessons from political science. In B. Cooper, J. Cibulka, & L. Fusarelli (Eds.), Handbook of education politics and policy. New York, NY: Routledge.

  • McLendon, M., & Mokher, C. (2009). The origins and growth of state policies that privatize public higher education. In C. Morphew & P. Eckel (Eds.), Privatizing the public university: Perspectives from across the academy (pp. 7–32). Baltimore, MD: Johns Hopkins University Press.

    Google Scholar 

  • Meyer, B. D. (1995). Natural and quasi-experiments in economics. Journal of Business & Economic Statistics, 13(2), 151–161.

    Google Scholar 

  • New, M. J. (2010). U.S state tax and expenditure limitations: A comparative political analysis. State Politics & Policy Quarterly, 10(1), 25–50.

    Google Scholar 

  • Pascarella, E. T. & Terenzini, P. T. (2005). How college affects students: Volume 2 A third decade of research. San Francisco, CA: Jossey-Bass.

  • Prescott, B. (2010). Is Colorado’s voucher system worth vouching for? Change: The Magazine of Higher Learning, 42(4), 20–26.

    Article  Google Scholar 

  • Protopsaltis, S. (2006). The colorado voucher system: Implications for higher education. College and University, 81(2), 45–48.

    Google Scholar 

  • Pusser, B. (2002). Higher education, the emerging market, and the public good. In The knowledge economy and postsecondary education. Washington, DC: National Academies Press.

  • Pusser, B. (2005) From ideology to policy: The evolution of choice in higher education. Unpublished manuscript.

  • Pusser, B. (2006). Higher education, markets, and the preservation of the public good. In D. Breneman, B. Pusser, & S. Turner (Eds.), Earnings from learning: The rise of for-profit universities (pp. 23–50). New York: SUNY Press.

  • Scott-Clayton, J. (2012). Information constraints and financial aid policy. National bureau of economic research working paper series, no. 17811.

  • St. Clair, T. (2012). The effect of tax and expenditure limitations on revenue volatility: Evidence from Colorado. Public Budgeting & Finance, 32(3), 61–78.

    Google Scholar 

  • St. John, E. P. (2003). Refinancing the college dream: Access, equal opportunity, and justice for taxpayers. Baltimore: Johns Hopkins University Press.

  • Stater, M. (2009). Policy lessons from the privatization of public agencies. In C. Morphew & P. Eckel (Eds.), Privatizing the public university: Perspectives from across the academy. Baltimore: Johns Hopkins University Press.

  • Steinberg, R. (2006). Economic theories of nonprofit organizations. In W. W. Powell & R. Steinberg (Eds.), The nonprofit sector: A research handbook (2nd ed., pp. 117–135). New Haven: Yale University Press.

  • Stiglitz, J. E. (1999). Knowledge as a global public good. Global public goods, 1(9), 308–326.

    Article  Google Scholar 

  • U.S. Census Bureau. (2013). American Community Survey: State and County Quick Facts accessed online (1/20/2013). http://quickfacts.census.gov/qfd/states/08000.html.

  • U.S. Department of Education. (2011). Distribution of federal Pell Grant recipients by family income and type and control of institution (Table 6). 2009–2010 Federal pell grant end-of-year report. Reports; Datasets; Statistical Reports.

  • Waisanen, B. (2010). State tax and expenditure limits, 2010. Denver, CO: National Conference of State Legislatures.

  • Watkins, K. (2009). State spending limitations: TABOR and referendum C. Denver: Colorado Legislative Council Staff.

    Google Scholar 

  • Weibel, A., Rost, K., & Osterloh, M. (2010). Pay for performance in the public sector—Benefits and (hidden) costs. Journal of Public Administration Research and Theory, 20(2), 387–412.

    Article  Google Scholar 

  • WICHE. (2009). An evaluation of Colorado’s college opportunity fund and related policies. Boulder, CO: Western Interstate Commission for Higher Education.

    Google Scholar 

  • WICHE. (2013). Knocking at the college door. WICHE: Boulder, CO.

  • Winston, G. C. (1999). Subsidies, hierarchy and peers: The awkward economics of higher education. The Journal of Economic Perspectives, 13(1), 13–36.

    Article  Google Scholar 

  • Zhang, L., & Ness, E. C. (2010). Does state merit-based aid stem brain drain? Educational Evaluation and Policy Analysis, 32(2), 143.

    Article  Google Scholar 

  • Zumeta, W. (2006). The new finance of public higher education. The NEA 2006 Almanac of Higher Education, pp 37–48.

Download references

Acknowledgments

We would like to thank Brian Prescott, Don Heller, and two anonymous reviewers for their helpful reviews of earlier versions; any errors or oversights are our own. Correspondence concerning this article should be addressed to Nicholas W. Hillman, Department of Educational Leadership and Policy Analysis, University of Wisconsin-Madison, School of Education Room 249, 1000 Bascom Mall, Madison, WI 53706.

Author information

Authors and Affiliations

  1. University of Wisconsin-Madison, Madison, WI, USA

    Nicholas W. Hillman

  2. Florida State University, Tallahassee, FL, USA

    David A. Tandberg

  3. University of Louisville, Louisville, KY, USA

    Jacob P. K. Gross

Authors
  1. Nicholas W. Hillman
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. David A. Tandberg
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Jacob P. K. Gross
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Nicholas W. Hillman.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Hillman, N.W., Tandberg, D.A. & Gross, J.P.K. Market-Based Higher Education: Does Colorado’s Voucher Model Improve Higher Education Access and Efficiency?. Res High Educ 55, 601–625 (2014). https://doi.org/10.1007/s11162-013-9326-3

Download citation

  • Received:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11162-013-9326-3

Keywords

Search

Navigation