Study finds links between institutional spending and student outcomes

There’s a good reason to pay faculty higher salaries: it helps alumni (and even non-alumni) earn higher salaries after graduation. A forthcoming study from Wake Forest University in Winston-Salem, N.C., finds that institutions that invest more money into faculty salaries, as well as services that directly benefit students (like tutoring, student organizations or career counseling), have better student employment outcomes post-graduation. The study looked at 5,000 students who attended four-year colleges from 2002 to 2012. 

Increasing spending on faculty salaries from the 25th percentile to the median increased salaries 1.5 percent for graduates and 4 percent for non-graduates. Increasing faculty salaries even more, to the 75th percentile, led to salary increases of 4.6 percent for graduates and 12.5 percent for non-graduates.

Investing in faculty salaries tended to benefit students from disadvantaged backgrounds most in finding full-time employment in their field, while investing in student services helped advantaged students.

“The research highlights the importance of high-quality faculty, as well as the importance of educational student services,” says Amanda Griffith, associate professor of economics at Wake Forest and one author of the study. “Increased spending in these areas benefits students — putting their tuition dollars to good use.” 

Find more information here.

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