Declining Community College Enrollment & Labor Market Strength

Authors: Joshua Goodman and Joseph Winkleman

Project Summary

Declining U.S. college enrollments have triggered questions about the health of the postsecondary sector. This project examines national data collected through the Department of Education’s Institute for Education Sciences to better understand shifts in the sector and help situate trends within the context of broader economic and labor market context.

These findings have important implications for policy discussions about higher education. The common narrative of a broad crisis in college enrollment obscures the fact that traditional four-year institutions have not experienced meaningful declines. The community college enrollment patterns we document appear to reflect rational responses to improving economic opportunities rather than a fundamental loss of faith in higher education. While declining community college enrollments present challenges for institutional 2 finances and capacity, they may not represent a clear welfare loss for the marginal students who choose employment over enrollment, particularly given their low probability of degree completion.

Key Findings

  • Declines are driven not by the four-year sector but by two-year community colleges, which have apparently shrunk by over 30% since the peak of the Great Recession
  • Over one-third of this apparent decline is an artifact of some community colleges being reclassified as offering four-year degrees
  • Pre-Great Recession data shows that a 1 percentage point increase in the local unemployment rate increases first-time community college enrollment by 2 percent, suggesting many students are on the margin between community college and job opportunities. These estimates suggest that strengthening labor markets explain about 60% of the post-Great Recession decline in first-time community college enrollment
  • Declining enrollments do not translate into reduced degree completions which means the marginal missing community college student appears unlikely to have completed a degree

 

Project Resources