Earmarks and state appropriations for higher education

This study considers the relationship between federal academic earmarks and state appropriations for higher education. Often referred to as pork, federal academic earmarks are both controversial and understudied. Using a unique panel dataset which spans 1990-2006, this study conducts a panel analysis with two-way state and year-fixed effects. It finds a positive, significant relationship between federal spending on academic earmarks and state spending on higher education appropriations. The effect is large in magnitude. For every dollar increase in federal earmarks received by institutions within a state, state appropriations for higher education increase by $1.98 to $4.75, depending on the measure of appropriations used. Additional analyses show that the relationship is a recent phenomenon, appearing most strongly after 1997.