Expenditures and postsecondary graduation: An investigation using individual-level data from the state of Ohio

Using detailed individual-level data from public universities in the state of Ohio, I estimate the effect of various institutional expenditures on the probability of graduating from college. Using a competing risks regression framework, I find differential impacts of expenditure categories across student characteristics. I estimate that student service expenditures have a larger impact on students with low SAT/ACT scores, while instructional expenditures are more important for high test score students and those majoring in scientific/quantitative fields. The individual-level nature of these data allows me to address measurement error and endogeneity concerns the previous literature has been unable to deal with.

► I assess the effect of various expenditures on the likelihood of graduating college. ► I use individual-level data from the state of Ohio to improve upon previous studies. ► In a competing risks model, I find differential effects among types of expenditures. ► I find that student services matter more for students with low entrance test scores. ► I find instruction matters more for high ACT/SAT and scientific/quantitative majors.