Higher education finance and success rate in US states: An insight from state-level data

We investigate the nexus between education spending and education success measured through attainment rate for 50 US states. Our emphasis is mainly to use state-level data on education spending which occur in general and specific terms. The outcome from our finding can be summarized as follows. One, education spending constitutes a significant factor that motivates people for higher education and it is a motivating factor that ensures completion. Two, we establish further emphasis with the types of spending and its differing stance on education success. While general spending plays important roles in this regard, specific (particularly spending on capital project) is found to reverse the success rate. This suggests that capital spending on education necessarily needs to reach a defined threshold to incite positive check in the current nexus. Three, the magnitude of impact for total spending is lower than when general spending is used, which make the impact of capital spending more conspicuous. Lastly, we also establish asymmetric impact of spending across differing categories between Black Belt and Non-Black Belt states. While the spending pattern is significant for both regions, the magnitude is higher for the Black Belt region indicating the tendency of the region to benefit more when spending improves. We further offer important policy stance.