Does State Allocation of University Funding Moderate Effectively Maintained Inequality?

Abstract

According to the theory of Effectively Maintained Inequality (EMI), economically advantaged individuals not only enter each level of education at higher rates than do their less advantaged peers, but also enjoy qualitative advantages at each level that position them more favorably to continue to the next level. Governments may play a role in facilitating or limiting EMI because they allocate appropriations to public universities; the more between-university variability in these funds, the more horizontal differences high-income students may exploit. I ask whether Wisconsin’s unequal pattern of appropriations across its institutions of higher education exacerbates income-based disparities in college persistence. I test two hypotheses: (1) Economically advantaged students sort into the universities with greatest appropriations; (2) Appropriations promote first-to-second-year persistence. Evidence in favor of both hypotheses would support the claim that an unequal pattern of appropriations exacerbates college persistence disparities and, accordingly, suggest that unequal allocation facilitates EMI. Results support hypothesis (1) but not hypothesis (2). The results do not present evidence that the Wisconsin state government facilitated or limited EMI based on its allocation of funds across universities.