Do community colleges really divert students from earning bachelor's degrees?

This paper provides new estimates of the 'diversion effect' argument advanced by critics of community colleges. As emphasized by Rouse (J. Business Econ. Statist. 13 (1995) 217), information on students' desired level of schooling is essential to properly measure the diversion effect of community colleges as well as their 'democratization effect' increasing access to higher education. Using information on desired years of schooling from early waves of the NLSY, we find that the choice between alternative postsecondary education tracks including the choice of community college students between transfer and terminal programs is highly sensitive to years of desired schooling. Diversion effect estimates are also found to depend on whether we condition on desired schooling. For individuals who express a desire to complete at least 16 years of schooling, our diversion effect estimates lie between -0.7 and -1.0 years. These estimates are clearly dominated by positive democratization effect estimates. On balance, therefore, we find for individuals desiring a bachelor's degree that community colleges increase average educational attainment by between 0.4 and 1.0 years. (C) 2001 Elsevier Science Ltd. All rights reserved.