Community Colleges and Labor Market Conditions: How Does Enrollment Demand Change Relative to Local Unemployment Rates?

This study uses fixed-effects panel data techniques to estimate the elasticity of community college enrollment demand relative to local unemployment rates. The findings suggest that community college enrollment demand is counter-cyclical to changes in the labor market, as enrollments rise during periods of weak economic conditions. Using national data for the years 1990 through 2009, we find that a one percentage-point change in unemployment is associated with 1.1-3.3 % increases in enrollment demand. We disaggregate the analysis by total full-time and part-time enrollment, concluding that high levels of unemployment are also associated with greater demand for full-time attendance. Additionally, enrollments are slightly more responsive to unemployment in metropolitan (rather than micropolitan) areas. Informed by enrollment demand theory, our analysis provides an update to the "unemployment elasticity" literature and could aid in current enrollment planning, economic development, and public policy efforts to educate students on the margin between college and work.