Measuring Value-Added in Higher Education

In this paper, we outline a practical guide for policymakers interested in developing institutional performance measures for the higher education sector. As our proposed measures adjust, at least partially, for pre-existing differences across students, we refer to them as input-adjusted outcome measures (IAOMs). We develop a general methodology for constructing IAOMs using student-level administrative data, we estimate IAOMs for one large U.S. state, and we discuss the merits and limitations of the available data sources in the context of our empirical analysis.