Poster #14 - Can economic downturns be windows of opportunity?: How the Great Recession shaped degree attainment and earnings

• In Event: Friday Poster Reception

Abstract

One influence on an individual’s college-going decision is the state of the labor market. Past work shows that postsecondary enrollments increase during economic downturns and this relationship is stronger for community college enrollments than that for four-year universities (Betts and McFarland, 1995; Christian, 2007; Foote and Grosz, 2020; Sorensen and Hwang, 2021). The Great Recession was no exception to this rule: between 2007 to 2010, community college enrollment in the United States grew by 13 percent compared to either decreasing or staying constant between 2002 to 2007 (Barrow and Davis, 2012). However, it is not clear if students who decided to enroll in community colleges due to poor labor market prospects during the Great Recession, especially those who would not have enrolled in college otherwise, were ultimately better off in terms of successfully completing their degrees and increasing future earnings.

This paper uses student-level data from Texas community colleges to examine whether students who enrolled during the years of the Great Recession have different rates of degree completion and earnings returns compared to students who enrolled during non-recession years. For students who had employment history prior to enrolling in a community college during the Great Recession, I also examine whether their earnings trajectories changed due to their enrollment decision. Lastly, I test multiple explanations for why there may be a difference between these two groups of students, considering factors such as the differing levels of students’ college preparedness, levels of available institutional resources, congestion effects (i.e., effect of more students vying for the same number of classes, academic advisors, etc.), and peer effects (i.e., effect of having a greater proportion of students who are less college prepared).

To address these questions, I use a difference-in-differences design that compares cohorts of students who enrolled at a Texas community college across enrollment years, specifically before or after the onset of the Great Recession. I also compare across community colleges by whether they were in counties that were more or less affected by the Great Recession, measured by how much the county’s unemployment rate increased from 2007 to 2009 or by the size of the construction or manufacturing industries within the county. I find that cohorts who enrolled during the Great Recession were 9.5% less likely to complete a degree within six years compared to non-recession enrollment cohorts; however, there is no statistically significant difference in completion rates for students enrolled at community colleges in counties that were more severely impacted by the Great Recession.

The findings of this study will provide insight into how increased community college enrollments during economic downturns can be translated into increased educational attainment and income mobility by identifying factors that may hinder the success of students who enroll during economic downturns. These insights can help policymakers and community college administrators develop flexible strategies that can anticipate the differing needs of students based on the strength of the labor market, which may help increase the success of all students regardless of when they choose to enroll.

Author

• Hanna Han, University of Wisconsin-Madison
  Presenting Author