The Effects of Workforce-Aligned Grants on College Enrollment, Credential Completion, and Labor Market Outcomes

• In Event: Aligning Dollars with Demand: Effects of Workforce-Aligned Financial Aid on Postsecondary and Labor Market Outcomes

Abstract

In recent years, many states have incentivized students to enroll in workforce-aligned sub-baccalaureate postsecondary education programs through grant programs. These workforce-aligned grant programs are different than many other types of state aid because they align with specific state workforce priorities and are typically designed so that targeted fields of study vary with labor market demand trends. While there is a large literature examining financial aid programs more generally, there is little research on grants for workforce-aligned postsecondary programs. In this paper, we examine the causal effects on college enrollment, credential completion, and labor market outcomes by focusing on the workforce-aligned grant program in Kentucky, the Work Ready Kentucky Scholarship (WRKS).

WRKS is a “last-dollar” program that started in the 2017-2018 academic year. It provides state grants for students who enroll in sub-baccalaureate certificate and associate degree programs in one of fields labelled as high-demand by the state (currently advanced manufacturing, business/information technology, construction, healthcare, and transportation/logistics). The intent of the program is to increase the supply of workers trained in high-demand industry sectors and to address emerging skills gaps, tying industry-recognized credentials and potential career pathways to high-wage and high-demand occupations. 

The primary data we use in the analysis are administrative postsecondary education system records for the state of Kentucky, including information for all students who attended 16 community colleges with more than 70 locations across the state. The data provide information on enrollment records, credential attainment, financial aid, institution-related information, and student-level demographics. We then merge the postsecondary education data with quarterly earnings and employment records from the state Unemployment Insurance (UI) program.

We begin our analysis by estimating a staggered difference-in-differences model with program fixed effects, comparing within-program changes in enrollment and credential completion before and after WRKS eligibility. We find that WRKS eligibility leads to an average increase of 11 students enrolled per program per year (a 15% rise relative to the pre-treatment mean). Credential attainment also increases, with programs awarding an additional 2 associate degrees (a 25% increase) and 7 certificates (a 13% increase) per program per year, on average.

Next, we implement a stacked difference-in-differences design with student fixed effects to examine changes in labor market outcomes before and after enrollment in WRKS programs, comparing students who enrolled in eligible programs to those who did not. We find positive effects on earnings beginning in the eighth quarter after WRKS program enrollment, although these gains start to level off by the twelfth quarter. However, we do not observe significant changes in employment rates.

Authors

• Rajeev Darolia, University of Kentucky
  Non-Presenting Co-Author

• Ron W Zimmer, University of Kentucky
  Non-Presenting Co-Author

• Chuanyi Guo, University of Kentucky
  Presenting Author

• Emily Wilcox Walls, University of Kentucky
  Non-Presenting Co-Author

• Kangwook Noh, University of Kentucky
  Non-Presenting Co-Author