A growing number of states use performance-based funding (PBF) systems to tie appropriations to student outcomes. Yet while many studies have examined the effects of PBF on enrollment and completion outcomes, no research has considered whether PBF affects post-college outcomes. This is of particular importance as more states directly incentivize colleges to improve student earnings and have students major in high-demand fields in PBF systems. We used the first detailed longitudinal dataset of state PBF policies to examine the effects of PBF on student earnings and found modest positive effects for four-year universities and generally null effects for community colleges.
