Performance-Based Funding and Certificates at Public Four-Year Institutions

Abstract

This study examines how performance-based funding (PBF) for public four-year institutions in the U.S. is associated with the production of short-term certificates. Results indicate that high-dosage PBF is associated with increases in both the number of short-term certificate programs offered and the number of short-term certificates awarded, even though PBF’s incentives for the four-year sector typically focus on bachelor’s degree attainment. Given the challenges of improving performance on bachelor’s degrees, particularly in the midst of insufficient resources and support, institutions may be turning to certificates as alternative sources of revenue to address the financial uncertainty induced by PBF. The findings shed light on the broader impact of PBF on institutional behavior, beyond those directly relating to formalized performance metrics.