Labor Earnings and Community College Enrollment Since COVID: Evidence from California

Johnson, B., Bald, A., Avery, C., & Swanson, E. (2024). “Labor Earnings and Community College Enrollment Since COVID: Evidence from California.” Working paper.

Abstract:

Community college enrollments have fallen nearly 20 percent since 2019. In this paper, we examine the extent to which earnings growth has depressed enrollments in the California Community Colleges system, the largest network of community colleges in the U.S. We instrument for county labor earnings growth using a Bartik instrument approach that allows us to estimate labor earnings elasticities of enrollment by county for individuals over age 25 with a high school education. We estimate a pre-COVID elasticity of -0.99, and we find modest evidence that enrollment has become less sensitive to labor earnings since 2019. Enrollment declines are far greater than we would predict using observed earnings growth and estimated elasticities: Of the 18 percent decline in enrollments from Fall 2019 to Fall 2022, we attribute just 8 to 10 percent to earnings growth.