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Migration, Benefit Spillovers and State Support of Higher Education

Center for Urban Studies, School of Urban and Public Affairs, Portland State University, Portland, OR 97207, USA

This paper tests the hypothesis that benefit spillovers from public higher educationproxied by out-niigration-led to lower higher education appropriations by state legislatures. A model addressing legislative appropriations, tuition and out-migration activity is developed and estimated. The results support the benefit spillover hypothesis, indicating that for each percentage point increase in out-migration, appropriations per student decline by $100. The results also reveal a bi-directional relationship between tuition and state appropriations. This is in contrast with the view that tuition is a 'residual' source of revenue representing the difference between the institutional budgets endorsed by educational policy-makers and the level of state appropriations.

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