The Effect of Local Unemployment on Community College Graduation Rates
Blagg, Kristin Elizabeth
Several studies have demonstrated that a rise in unemployment rates is correlated with an increase in community college enrollment, but the effect of unemployment on community college completion rates has not been measured precisely. Using graduation rate data from National Center for Educational Statistics (NCES)'s Integrated Postsecondary Education Data System (IPEDS), I employ an institution-level fixed-effects model to determine the correlation between local unemployment and graduation within 150 percent of expected time from public and non-profit community colleges. I show that changes in county-level unemployment, particularly in the year of enrollment and second year of attendance, have a small but statistically significant positive relationship with the graduation rate. This effect is most prominent in low- tuition schools. These findings indicate that community college graduation rates are responsive to changes in the labor market, suggesting the need for state and local policy measures that support community colleges and the ability to attain a credential when unemployment levels increase.
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