University Endowment Growth: Assessing Policy Proposals
|Milton, Ross T.
|Ehrenberg, Ronald G.
|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.
|WP162.pdf: 13 downloads, before Oct. 1, 2020.
|Required Publisher Statement: Published by the Cornell Higher Education Research Institute, ILR School, Cornell University.
|University Endowment Growth: Assessing Policy Proposals
|Milton, Ross T.: Cornell University
|Ehrenberg, Ronald G.: email@example.com Cornell University ILR School