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  5. University Endowment Growth: Assessing Policy Proposals

University Endowment Growth: Assessing Policy Proposals

File(s)
WP162.pdf (474.24 KB)
Permanent Link(s)
https://hdl.handle.net/1813/74803
Collections
ILR Working Papers
Cornell Higher Education Research Institute (CHERI)
Author
Milton, Ross T.
Ehrenberg, Ronald G.
Abstract

The growth of college and university endowments, particularly those of elite schools, have drawn the attention of policymakers and pundits. Using a decomposition of the growth of endowments between 1991 and 2010 we simulate the effects of three prominent proposed policies had they been implemented in 1991 on endowment payouts through 2010: (1) a minimum spending rule, (2) removing full income tax deductibility of donations, and (3) taxing total endowment sizes beyond a given size. We find that a minimum spending rule increases the average size of endowment payouts for all quartiles of the endowment distribution in nearly all years of the sample period and has a modestly larger relative impact on richer schools. Removing tax deductibility decreases endowment payouts with its effect increasing over time. It has a larger relative impact on schools with smaller endowments than on richer schools.

Date Issued
2014-09-01
Keywords
higher education
•
endowments
•
distribution
Rights
Required Publisher Statement: Published by the Cornell Higher Education Research Institute, ILR School, Cornell University.
Type
article

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