College or Bust… or Both:
The effects of the Great Recession on college enrollment for Black and Latino students
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Tolani A. Britton
December, 2014
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HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
Author Note
I would like to thank Dick Murnane, John Willett, Bridget Terry Long, and David
Deming for their extensive help with this paper. All errors are my own.
Correspondence concerning this article should be addressed to Tolani Britton at
tob998@mail.harvard.edu.
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HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
Abstract
3
This paper looks at whether the Great Recession (GR) led to changes in two-year and
four-year college enrollment patterns for students aged 18-24. In particular, I examine
how the odds of enrollment have changed for Black and Latino students. It is not initially
clear whether the GR would increase or decrease college enrollment. On the one hand,
higher unemployment could prompt people to enroll in college, but on the other, reduced
credit availability could decrease an individual’s ability to cover tuition costs. I exploit
the severity of the recession in different states to compare how enrollment evolved in
states that had unemployment rates above the national average during the recession using
the Current Population Survey (CPS) October Education supplements from 2000-2012 as
the data source. Using a difference-in-difference (DD), I find that the odds of college
enrollment in two-year institutions as opposed to not enrolling increased after the onset of
the Great Recession in states with above average unemployment. However, using a
differences–in-differences-in-differences (DDD), I did not find differential enrollment
patterns for Black and Latino students when compared to their White peers in states with
unemployment above the national average.
Keywords: college enrollment, Great Recession, Black college enrollment, Latino college
enrollment
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
College or Bust… or Both:
4
The effects of the Great Recession on college enrollment?
College enrollment1 is based on numerous factors, most notably the financial
circumstances of families. The most recent economic recession, also known as the Great
Recession, commenced in December of 2007 and had negative repercussions for the
financial status of families. The rapid loss of home values and the illiquidity in the credit
market, in particular, reduced the ability of families to take on debt (Hurd & Rohwedder,
2010), and perhaps the willingness to do so.
Generally, college enrollment increases during recessions due to reduced
employment opportunities for 17-25 year olds (Dellas and Sekallaris, 2003). What
complicates the effects of the most recent recession on college enrollment was the decline
in home values, given that some families were using home equity to finance higher
education. Hurd and Rohwedder (2010) show that the Case Shiller index, which measures
average housing prices, was 18% lower in October 2008 as compared to October 2007.
According to McCarthy and Peach (2003), home values only decreased moderately
during past recessions, in stark contrast to the most recent recession. As home values
declined, people had less equity against which to borrow and use to fund their children’s
education. Mian and Sufi (2009) estimate that between 2000 and 2006, home equity
borrowing amounted to 2.8% of GDP each year, with much of the borrowing coming
from credit constrained households. About 3% of all home equity loans, or
approximately $7 billion dollars of home equity, financed higher education in 2006 alone
1
I use the terms college and university interchangeably throughout this paper.
5
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
(Grant, 2007). Estimates place the home equity loss from 2006-2012 at $7 billion dollars
(Ellen & Dastrup, 2012).
Previous research suggests that many families with fewer liquid assets rely more
heavily on home equity to finance college (Lovenheim, 2011; Hurst & Stafford, 2004).
Given the reliance of middle class families on the use of home equity to finance higher
education, the recession likely affected decisions around college attendance (Lovenheim,
2011). Beyond the loss of home equity, in the face of high default rates on loans, banks
were less willing to lend to credit-constrained homeowners using home equity as
collateral. This decreased access to previously used sources of funding for the families
who did not have other ways to pay for higher education (Mian & Sufi, 2010; Haltenhof
et al, 2012).
In light of these changes, this paper analyzes how the recession impacted college
enrollment for traditional students, aged 18-24, and particularly for Black and Latino
students relative to their White peers, using the Consumer Population Survey (CPS)
education supplements.2 The enrollment of Black and Latino students might differ from
that of White students due to the lesser familial assets of Black and Latino families at all
levels of income, higher rates of unemployment during Recessions, and the
disproportionate impact of the home equity loss on Black and Latino households
(Squires, Hyra, & Renner, 2009). To date, while some work has addressed the impact of
the Great Recession with regards to higher education, there is little empirical work that
studies the enrollment patterns of Black and Latino students during the Great Recession
(Long, 2014; Turner, 2013). Changes in college attendance patterns warrant study given
2
The age range between 18 and 24 defines “traditional age” students. This group of students generally enters higher
education directly after high school and enrolls full-time.
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
that a less educated work force means lower economic productivity; a recession
6
combined with reduced access to credit could lead to lower college enrollment
(Oreopoulos & Petronijevic, 2013). More importantly, college serves as a path to upward
mobility (Brand & Xie, 2010).
Using a differences-in-differences-in–differences (DDD) strategy, this paper
compares college enrollment patterns for Black and Latino students before and after the
Great Recession in more and less highly impacted states. In order to carry out this
analysis, I first explore whether this recent recession was associated with a change in the
probability of enrollment for Black and Latino students as compared to White students
and then whether states with higher than average unemployment rates had changes in the
probability of enrollment. Using a difference-in-difference (DD) strategy that includes
all states and not simply states with higher than average unemployment, I find that Black
students were not more likely to enroll in college after the onset of the Great Recession. I
can rule out impacts larger than a 6.6% increase in the likelihood in enrollment for Black
students. However, Latino students had a 3% greater likelihood of enrolling in two-year
institutions when compared to their White peers. Also using a DD, I find that the odds of
enrollment in two-year colleges as compared to not enrolling increased by 1.7% for
students in states with high unemployment after the onset of the Great Recession.
However, these effects were not different for Black and Latino students when compared
to White students. In terms of enrollment in four-year colleges, states with higher than
average unemployment did not see increases in the probability of enrollment when
compared to not enrolling. Similarly to the results for two-year institutions, there were no
7
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
significant changes in enrollment for Black and Latino students in four-year colleges in
more highly impacted states when compared with their White counterparts.
I first review prior research on college enrollment during recessions. Next, I
present the data and empirical strategy used to establish the impact of the Great
Recession on college enrollment in states with higher unemployment as compares to
other states. I then discuss the results, consider threats to validity, and conclude.
Literature Review
Traditional human capital models suggest that people invest in college education
based on the present discounted value (PDV) of the cost and benefits (Becker, 1975).
Numerous authors (Paulsen, 1990; Pelavin & Kane, 1990; Long, 2004) find that college
enrollment depends on a variety of factors including tuition price, family income, and
quality of the institution. In theory, families employ a cost and benefit analysis in order to
determine whether an investment in college should be made. The costs include tuition
and the foregone earnings or the opportunity cost. The benefits are the anticipated higher
earnings because of the college degree (Becker, 1994).
Research on College Enrollment during Recessions
Economic theory predicts that during a recession individuals would be more
likely to return to college because of increases in the unemployment rate which lead to a
lower opportunity cost of schooling. Numerous studies on the links between college
enrollment and the business cycle show that enrollment patterns trend in the opposite
direction of economic activity. An analysis of 86 industrialized and developing countries
8
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
over the period from 1970 to 2000 finds that unanticipated negative shocks to national
production lead to increases in educational attainment (Heylen & Pozzi, 2007). Using
vector autoregression analysis on enrollment data from the National Center for Education
Statistics, Ewing, Beckert, and Ewing (2010) show that in response to unexpected
economic shocks between 1963 and 2004, enrollment increases, particularly for females.
Another study also finds that college enrollment goes counter to the business cycle,
though this is true only for White students (Dellas and Sakellaris, 2003). Using the CPS
October school supplement files from 1968-1988, they find that Black students have less
variability in enrollment than White students over the time period covered but their
college enrollment decisions are more sensitive to the real interest rate.
Although some studies have shown that college enrollment increased during past
recessions, whether individuals were more or less likely to enroll in college during the
Great Recession is not clear based on the opposing effects of the lower opportunity costs
versus the diminished access to credit and lower income. College-aged persons were
more likely to be unemployed and thus less likely to have earnings as a foregone, or
opportunity, cost during the Great Recession, as compared to past recessions. Bell and
Blanchflower (2011) show that the unemployment rate for people under the age of 25
increased from 11.5% in the first quarter of 2008 to 18.3% in the fourth quarter of 2010.
In contrast, during the recession of 2001, unemployment rates for people aged 16-19
went from 13.6% in the first quarter to 15.8% in the fourth quarter of the year (Langdon,
Mcmenamin, & Krolik, 2002). Given the comparatively high rates of unemployment for
people under the age of 25 during the Great Recession, getting a degree was relatively
9
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
less expensive when compared to past recessions, since people were more likely to be
unemployed and thus not foregoing a salary to enroll in college.
The competing effects to the lower opportunity cost are the income effect and a
credit constraint. If unemployment is higher, there exist fewer opportunities to earn
income with which to finance education. Further, salaries countrywide stagnated during
the recession, so real income was not increasing even for those who were working (Katz,
2010). Median household income in 2007 was $54,489 but decreased each year during
the Great Recession to $50,054 in 2011(Pew, 2011). This negative income effect impacts
an individual and families’ ability to pay for college, as they have less income with which
to pay tuition. Further, since access to credit of all forms, from credit card to home equity
loans, was also reduced for families with few liquid assets during this past recession,
even with lower interest rates, an individual might be less likely to attend because they
cannot borrow enough to pay tuition costs (Haltenhof et al, 2012). Christian (2007) uses
October supplements of the Current Population Survey data from 1968-2000 to show
that, generally, liquidity constraints, which he defines as a limited ability to borrow, lead
to college enrollment for 18 and 19 year old students moving in the same direction as the
business cycle, particularly for low-income families.
Downturns in the business cycle also have an effect on the value of household
assets that might be used to finance college. Two recent studies examine how changes in
parental wealth and in particular housing wealth affected children’s college enrollment
decisions and educational attainment levels. One study measures how enrollment
changed during the economic boom prior to the Great Recession (Lovenheim, 2011). A
second study by Johnson (2012) looks at how housing values before and during the Great
10
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
Recession impacted numerous post-secondary outcomes. Both papers use change in the
housing price index (HPI) at the Metropolitan Statistical (MSA) level as an exogenous
instrument for the endogenous variable familial wealth. These studies find similar results,
namely “short term increases in housing prices lead to significant improvements in
educational attainment and college quality among homeowners [only]” (Johnson, 2012,
p. 5). They do not find significant effects in families that rent homes or have other
dwelling arrangements, in part due to the fact that housing price changes might not fully
capture the economic variation in conditions for families that do not own property.
Beyond familial assets and income, government legislation around financial aid
also influences college enrollment. The most significant legislation for college (Higher
Education Opportunity Act) passed in August 2008. This bill increased Pell Grant limits
and lowered interest rates for subsidized and unsubsidized loans and went into effect in
July of 2009. Given that I use CPS education supplements from October, the change in
legislation would affect 2009 and any years following but not years prior to that date.
Another piece of legislation passed in 2008 was the Ensuring Continued Access to
Student Loans Act (ECASLA), which allowed the Department of Education to purchase
loans made by private lenders, thereby insuring student access to federal loans for the
school year. This act assuaged fears about receiving the anticipated financial aid for the
2008-2009 school year.
Recessions and the College Enrollment of Black and Latino Students
In 2007, 18-24 year old Blacks and Latinos had lower rates of college enrollment
in the year following graduation than their White peers, with respective rates of
approximately 56%, 64% and 70% (NCES, 2009). The gap between White and Black
11
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
young adults in terms of percentage enrolled actually increased between 2004 and 2008.
Prior research on gaps in college enrollment suggests that one reason for the gap is the
rising cost of college (Kane, 1994; Long 2004). From 2001–02 to 2011–12, there was a
40% increase in inflation-adjusted prices for undergraduate tuition, room, and board at
public institutions and a 28 percent increase at private institutions (NCES, 2013).
Blacks and Latinos in the United States have fewer assets on average than Whites
at all points in the income scale, which has implications for college enrollment and
choice (Kochhar et al, 2011; Paulsen & St. John, 2002). In 2009, the median net worth of
White households was $113,149, as compared to that of Black ($5,677) and Latino
($6325) families (Taylor, Kochhar, Fry, Velasco, & Motel, 2011). These differences in
familial wealth contribute to the differences in college enrollment between Black and
Latino and White students. Cameron and Heckman (2001) find that when controlling for
family background, Black and Latino students are more likely to enroll in college than
their White peers. However, a strong correlation exists between college enrollment and
family income and assets, particularly for Black students (Kane, 2004).
Availability of employment also affects the likelihood of attending college, given
the lesser assets of Black and Latino families. In the face of lesser assets and rising costs,
families might rely more heavily on income from employment. Not only are
unemployment rates higher for Blacks and Latinos than for Whites during recessions, but
also there is greater volatility in their respective rates, even when controlling for
education levels (Cherry & Rodgers, 2000; Couch & Fairlie, 2010). Overall,
employment rates for Black men have negative secular trends, and they are particularly
hard hit during economic downturns, as seen in the recessions of the 70’s, 80’s, and 90’s
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
(Holzer & Offner, 2006; Couch & Fairlie, 2010). During the Great Recession, the
12
unemployment rate for Blacks increased by 7.5% points and increased by 7.2% points for
Latinos, as compared to 5.2% points for Whites (Elsby, Hobijn, Şahin, Valletta,
Stevenson, & Langan, 2011).
In addition to having higher rates of unemployment during recessions, Black and
Latinos also have less access to borrowing when compared to Whites. Blacks and Latinos
are less likely to receive consumer credit, even when credit scores and neighborhoods are
controlled for and more likely to have been recipients of sub-prime loans than Whites
(Cohen-Cole, 2011; Ghent, Hernández-Murillo, & Owyang, 2011).
Given the two opposing effects of lower opportunity cost due to higher rates of
unemployment versus reduced income and access to credit previously mentioned, how
enrollment changes for Blacks and Latinos in comparison to their White peers during a
recession is not clear. Generally, for traditional age students from all racial and ethnic
groups, who fall within the age range from 18-24 years old and are dependents3, we
would anticipate that the stronger effect on college enrollment might be credit constraints
and income effects, not a lower opportunity cost, since parental assets are likely affected
by adverse macroeconomic conditions, as compared to independent students who do not
rely on parental support. However, Black and Latino students, even those who are
dependents, receive less financial help from their parents in financing higher education
than do White students (King, 1999: Shapiro, 2004; Pager & Shepherd, 2008). Further,
Black and Latino families generally report that they have difficulty coping with negative
3
A dependent is characterized under United States tax law as someone who lives with the person for more
than half the year and provides less than half of their own support. Additional rules apply according to
whether the dependent is a child or other relative (IRS, 2013).
13
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
financial shocks, such as the Great Recession, due to a lack of assets (Lusardi, Schneider,
Tufano, Morse, and Pence, 2011).
Black and Latino students are more likely to enter the workforce and go to college
during times of high liquidity than their White peers. In 2008, after the onset of the Great
recession, 19-23 year old Black and Latino undergraduate students were slightly more
likely to work from 26-40 hours than their White peers (Appendix 5). 22.6% of Black
undergraduates and 23.4% of Latino students worked 40 hours or more a week as
compared to 20.5% of White students in 2008 (NCES, 2008). We see similar trends in
2004, though with larger differences in the percentage of students working a full time job
between Black and Latino undergraduate students (25%) and White students (19%),
presumably, due in part due to the lower rates of unemployment (NCES, 2004). In times
of low liquidity, such as the Great Recession, we would expect that Black and Latino
undergraduates students might be more likely to return to school given the dearth of jobs,
but have a more difficult time financing college due to high unemployment rates. As
previously mentioned, recent research indicates that the impact of the Great Recession on
labor markets disproportionately impacted racial and ethnic minorities, males, younger,
and less educated workers (Hoynes, Miller & Schaller, 2012).
Federal aid also complicates the changes in enrollment patterns of Black and
Latino students as compared to White students. Federal and state financial aid could serve
as a mitigating factor to familial and individual credit constraints, particularly for
underrepresented students (Barr & Turner, 2012). Black students are more likely to
receive grants and loans than both Latino and White students (Santiago & Cunningham,
2005; NCES, 2012). In 2008, 63% of Black undergraduate students and 54% of Latino
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
students received federal financial aid in contrast to 44.5% of White students (NCES,
14
2008). Moreover, the amount disbursed for both federal grants and loans for post
secondary education rose during the Great Recession from $99 billion in 2006-07 to $185
billion in 2010-11 (College Board, 2013). Thus, Black and Latino students might have
been more likely to use federal aid to attend college during the Great Recession than their
White peers.
Great Recession and college enrollment
Although numerous studies have looked at college enrollment patterns during
economic crises, few studies examine whether the onset of the Great Recession affected
college enrollment rates differently for Black and Latino young adults than for Whites.
Using a difference-in-difference methodology and data from the Current
Expenditure Survey, Long (2014) finds that the overall impact of the Great Recession on
enrollment is positive, particularly for older students. She uses differences in the severity
of the recession, as measured by unemployment and housing values, to compare how
enrollment and spending on higher education have changed. Turner and Barr (2012),
using local unemployment rates as a measure of the severity of the recession, and data
from the Current Population Survey, find that localities more affected by the recession
tend to have higher college enrollment. They find the greatest proportional impact on
young adults in their mid 20’s. This is a different finding from that of Long (2014), who
finds that states that were more affected by the Great Recession had slower growth in
college enrollment and spending.
Although some studies have examined the impact of the Great Recession on
college enrollment, few studies have examined the differential impact on students from
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
underrepresented groups. This work adds to the existing literature by looking at how
15
college enrollment patterns have changed for Black and Latino students, as compared to
White students, as a result of the Great Recession. In this paper, I use a similar
methodology to Turner and Barr (2012) and Long (2014), namely using state
unemployment rates as a measure of severity, and the CPS supplements as a data source,
to establish whether Black and Latino students in states with higher than average
unemployment were more or less likely to enroll in college than their White peers. The
research question is thus: Did the onset of the Great Recession affect the college
enrollment rates of Black and Latino young adults more than it affected the college
enrollment rate of non-Hispanic White young adults?
Empirical Framework
Data
I use the October Current Population Survey (CPS) supplements, for the years
2000-2012, to examine trends in enrollment. The United States Bureau of Labor Statistics
(BLS) and the Census Bureau survey a random sample of the population (generally
60,000 family units) monthly in order to gather statistics on measures of employment,
earnings, and other characteristics of citizens, excluding the institutionalized population.
The reference person (an adult in the household) provides information on all family
members, including demographic characteristics. BLS interviews a particular household
four times, does not interview it for the following eight months and then resurveys it for
another four months. After this cycle, the household exits the sample. This survey
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
contains weights that accounts for state of residence, race, age, and sex of sampled
16
persons. I carry out my analysis with and without the probability weights, given that they
reduce bias and produce consistent estimates (BLS, 2012).
The survey is based on the dwelling and not the family. If a particular family
moves, the new family that inhabits the dwelling will be interviewed. Generally, this
sampling of a dwelling and not a family might skew the results if there was high mobility
because people might move from areas more affected by the recession to less affected
areas. However, Farber (2010) shows that mobility was limited during the Great
Recession due to changes in family assets and a depressed housing market, particularly
for homeowners. Eighty-five percent of college attenders come from families that own
their home (Lovenheim, 2011). Thus the vast majority of college enrollees are also in the
group least likely to relocate. I am also not attempting to establish within family patterns
but rather national trends, so a particular family leaving the sample would not affect my
analysis.
In October, BLS adds a supplement, which covers education enrollment at
primary, secondary and tertiary levels, using funding from the National Center for
Education Statistics (NCES). Since its inception in the late 1960’s, this supplement
provides information on school enrollment and educational attainment, differentiating
between types and intensity of enrollment. Variables of interest include how many
people are enrolled in college, whether they are enrolled part- or full-time, and the type of
institution (public or private, two-year or four -year.)
The CPS provides information on racial affiliation, family composition and
financial characteristics, which allows for inclusion of a rich set of covariates, from home
17
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
ownership to employment status of heads of households. I also account for geographic
locale as the CPS identifies state of residence and location in selected large Metropolitan
Statistical Areas (MSA), although CPS cautions users that estimates are more accurate
and complete at the state level as opposed to MSA. I thus use state fixed effects.
My sample is individual young adults between the ages of 18-24. This includes
students who are both dependents and independent. I chose this sample based on my
interest in exploring how college enrollment changed for traditional age students who
might have different enrollment patterns then older students (Deil-Amen, 2011).
Model
Given the disruption the Great Recession caused to national and local economies,
my statistical model uses student cohorts that enrolled pre and post-recession years as a
natural experiment. I take a first difference to see how enrollment changed over the time
period in question. Geographic variation in intensity of recession serves as my second
difference. I use the states that were highly affected by the recession as measured by their
unemployment rates, using the BLS Local Area Unemployment Statistics in 2009 as the
metric. I look at unemployment in 2009 for two reasons. First, the Great Recession
commenced in December of 2007, but some states might have felt the effects later.
Unemployment rates began rising in June of 2008 (Appendix 2). Second, the Recession
only became viewed as global in 2009 (IMF, 2009). States that had unemployment rates
of over 10% in 2009, which was above the national average of 9.3%, are considered
highly affected. Most of these states also had above average unemployment in 2008. The
twelve states that are considered highly affected in my sample are: California, Florida,
Indiana, Kentucky, Michigan, Nevada, North Carolina, Ohio, Oregon, Rhode Island,
18
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
South Carolina, Tennessee. My third difference is based on race and ethnicity. I compare
college outcomes for Black and Latino as compared to White young adults.
(1) 𝐶𝑜𝑙𝑙𝑒𝑔𝑒𝑖 = 𝛽0 + 𝛽1 𝑅𝑒𝑐𝑒𝑠𝑠𝑖𝑜𝑛𝑖 + 𝛽2 𝐻𝑖𝑔ℎ_𝑈𝑛𝑒𝑚𝑝𝑖 + 𝛽3 (𝑅𝑒𝑐𝑒𝑠𝑠𝑖𝑜𝑛 ∗
𝐻𝑖𝑔ℎ_𝑈𝑛𝑒𝑚𝑝)𝑖 + 𝛽4 𝑿 𝒊
(2) 𝐶𝑜𝑙𝑙𝑒𝑔𝑒𝑖 = 𝛽0 + 𝛽1 𝑅𝑒𝑐𝑒𝑠𝑠𝑖𝑜𝑛𝑖 + 𝛽2 𝐻𝑖𝑔ℎ_𝑈𝑛𝑒𝑚𝑝𝑖 + 𝛽3 𝑿 𝒊 + 𝛽4 (𝑅𝑒𝑐𝑒𝑠𝑠𝑖𝑜𝑛 ∗
𝑿)𝑖 + 𝛽5 (𝑅𝑒𝑐𝑒𝑠𝑠𝑖𝑜𝑛 ∗ 𝐻𝑖𝑔ℎ_𝑈𝑛𝑒𝑚𝑝)𝑖 + 𝛽5 (𝐻𝑖𝑔ℎ_𝑈𝑛𝑒𝑚𝑝 ∗ 𝑿)𝑖 + 𝛽6 (𝑅𝑒𝑐𝑒𝑠𝑠𝑖𝑜𝑛 ∗
𝐻𝑖𝑔ℎ_𝑈𝑛𝑒𝑚𝑝 ∗ 𝑿)𝑖
I commence with a set of ordinary least squares linear regressions (OLS). My
dependent variable is the binary variable College that equals 0 if a student is not enrolled
and equals 1 if a student is enrolled. My final linear model (2) has the variables
Recession, High_Unemp for states with higher than average unemployment, covariates
(X), and interactions. I interact Recession with the variable for high unemployment states.
The Recession*High_Unemp interaction term permits states with higher unemployment
to have different college enrollment trends before and during the recession when
compared to other states (Puhani, 2012). Another interaction is between
Recession*Black and Recession*Latino to capture whether Black and Latino students had
different probability of enrollment than their White peers. I also include a set of three
way interactions, Recession*High_Unemp*Black and Recession*High_Unemp*Latino, to
measure the impact of the recession on college enrolment in high unemployment states
for Black and Latino students as compared to their White peers in other states. In order to
account for multiple students within the same family, I adjust standard errors at the level
of the household in each of the models.
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
My predictor of interest for changes in enrollment is Recession*High_Unemp
19
because it shows how the odds of enrollment in college changed after the onset of the
Great Recession for states with unemployment percentages above the national average
when compared to other states. If the coefficient is positive and statistically significant,
this indicates that the odds of college enrollment increased after this economic shock. In
terms of my analysis for Black and Latino students, the variables Recession* Black and
Recession*Latino show how the Great Recession impacted college enrollment of Black
and Latino students as compared to their White peers. The DDD variables
Recession*High_Unemp*Black and Recession*High_Unemp*Latino reflect how
enrollment has changed following the onset of the Recession in states with high
unemployment when compared with before the Recession for these two groups of
students in comparison to their White peers.
One of the limitations of the OLS model is that it does not allow for meaningful
comparison between two- and four- year institutions because it can only measure a single
discrete outcome. However, the results from the OLS models offer ease of interpretation.
Given the limitations of the linear model, I also fit a set of maximum likelihood
multinomial logistic model, which compares the average probability of college
enrollment in a two- year or four -year institution, as opposed to not being enrolled,
before and after the onset of the recession. I employ this strategy because I want to
compare how enrollment changed for community colleges and bachelor degree granting
schools. Given that these two types of institutions have very different costs and student
populations, I would expect that the probability of enrollment would also be different.
20
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
The multinomial logistic models allow for direct comparison between two-year
and four-year enrollment. Here, College takes the value 1 if an individual has not enrolled
in college, the value 2 if an individual has enrolled in a two-year institution, and the value
3 if an individual is enrolled in a four-year college. The variable descriptions are the same
as previously defined. My final multinomial model is:
(3) Pr(Collegei ) =
𝑒 𝛽0 +𝛽1 𝑅𝑒𝑐𝑒𝑠𝑠𝑖𝑜𝑛𝑖 + 𝛽2 +𝛽3 𝑿 𝒊 +𝛽4 (𝑅𝑒𝑐𝑒𝑠𝑠𝑖𝑜𝑛∗𝑿)𝑖 +𝛽5 (𝑅𝑒𝑐𝑒𝑠𝑖𝑜𝑛∗𝐻𝑖𝑔ℎ_𝑈𝑛𝑒𝑚𝑝)𝑖 +𝛽6 (𝐻𝑖𝑔ℎ_𝑈𝑛𝑒𝑚𝑝∗𝑿)𝑖 +𝛽7 (𝑅𝑒𝑐𝑒𝑠𝑠𝑖𝑜𝑛∗𝐻𝑖𝑔ℎ_𝑈𝑛𝑒𝑚𝑝∗𝑿)𝑖
1+ 𝑒 𝛽0 +𝛽1 𝑅𝑒𝑐𝑒𝑠𝑠𝑖𝑜𝑛𝑖 + 𝛽2 +𝛽3 𝑿 𝒊 +𝛽4 (𝑅𝑒𝑐𝑒𝑠𝑠𝑖𝑜𝑛∗𝑿)𝑖 +𝛽5 (𝑅𝑒𝑐𝑒𝑠𝑖𝑜𝑛∗𝐻𝑖𝑔ℎ_𝑈𝑛𝑒𝑚𝑝)𝑖 +𝛽6 (𝐻𝑖𝑔ℎ_𝑈𝑛𝑒𝑚𝑝∗𝑿)𝑖 +𝛽7 (𝑅𝑒𝑐𝑒𝑠𝑠𝑖𝑜𝑛∗𝐻𝑖𝑔ℎ_𝑈𝑛𝑒𝑚𝑝∗𝑿)𝑖
Results
In each of the regression results tables, the first and second models give the
overall effect of the Great Recession on college enrollment as compared to pre-recession.
They also look at whether differential effects exist for Black and Latino student
enrollment after the onset of the Great Recession, as compared to White students. The
third and fourth models explore how the Great Recession differentially impacted college
enrollment in states with higher than average rates of employment as compared to states
with lower rates of unemployment. The fifth and sixth models account for whether there
were differential effects for Black and Latino enrollment, as compared to White students,
in states with high unemployment during the Great Recession. I interpret coefficients
from the second, fourth, and sixth models because they control for age, state fixed effects
and contain all the covariates.
< Insert Tables 2- 5 >
In Table 2, my first model is an ordinary least squares model with dependent
variable attended any college. In column 2, there were not differential effects on
21
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
enrollment for Black students after the recession began, as compared to White students.
However, Latino students had a 3.4% increase in the probability of enrollment after the
recession. In the fourth column, my primary predictor, High_Unemp*Recession is
positive and statistically significant. Results indicate that the probability of enrollment
increased after the onset of the Great Recession by 2.4 percentage points more in high
unemployment states than in other states. In column 6, there were not differential effects
for Black and Latino students in states with high unemployment when compared to their
White peers.
The dependent variable for Table 3 is enrollment in a four-year college. In the
second column, while there were not overall changes in enrollment after the recession for
students, the probability of enrollment in four-year colleges increased .4% points for
Black students as compared to White students. There were not statistically significant
changes in enrolment in four-year institutions in states with higher than average
unemployment (column 4) or for Black and Latino students in high unemployment states
when compared to White students (column 6).
For the outcome of enrollment in two-year college in the OLS model (Table 4),
the probability of enrollment increased for Latino students as compared to White students
by 3%, as seen in column 2. There was a 1.7% increase in the probability of enrollment in
a two-year college in states with higher than average unemployment when compared with
other states (column 4). In the final model in this table, similarly to the results for fouryear colleges, neither Black not Latino students in states with high unemployment saw
changes in the probability of enrollment in a community college.
22
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
The results from the multinomial logistic model in Table 5, which compare not
enrolling, with enrollment in two-year institutions and four-year institutions, are similar
to the results from the OLS models. From column 2, Latino students had a 44.2%
increase in the odds of enrolling in a community college as opposed to not enrolling after
the recession as compared to White students. Students in states with higher than average
unemployment had 20.3% increased odds of enrollment in two-year institutions when
compared with not enrolling, as seen in column 4. Black and Latino students in states
with higher unemployment did not have different odds of enrollment than White students
in these states.
The coefficients for the three-way interactions between Recession and
High_Unemp and Black and Recession and High_Unemp and Latino are not statistically
significant in Table 5 column 6. These results indicate that Black and Latino students in
states with high unemployment did not have a different likelihood of college enrolment
when compared to their White peers. Using general linear hypothesis tests, I verified that
the interactions between the Recession and the demographic characteristics were jointly
significant.4
Sensitivity Analysis and Threats to Validity
In order to check the sensitivity of the analysis, I carry out the multinomial logistic
analysis using a continuous variable that measures the change in the percentage of people
unemployed in each state between 2006 and 2009 (Table 7). The direction and magnitude
4
The typical test of joint significance in a multinomial logistic model is a likelihood ratio (LR) test.
However, Stata does not allow for the LR test when standard errors are clustered in the multinomial logistic
model. I thus carried out linear hypothesis tests.
23
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
of the point estimates are similar to those from the analysis using a binary variable for
high unemployment states.
I also conducted falsification tests. I first changed the starting year of the recession
from 2008 to 2006. I did not get the same results as above with this change. Instead, there
was not a statistically significant increase in two-year college enrollment as compared to
not enrolling in states that had high unemployment after the onset of the Great Recession
and there was an increase in four-year enrollment. This lends credence to the theory that
families in states that suffered high unemployment after the onset of the Great Recession
might have had access to credit that they used to finance college in four-year colleges
prior to the economic slowdown. Beyond the timing of the recession, I also explore how
changing the definition of high unemployment state might change the findings.
As previously mentioned, I include twelve states in my high unemployment variableCalifornia, Florida, Indiana, Kentucky, Michigan, Nevada, North Carolina, Ohio, Oregon,
Rhode Island, South Carolina, Tennessee. Many of these states are located in the South
and West. In addition to being states with the highest unemployment during the height of
the Great recession in 2009, the major cities in states such as Nevada, Florida, and
Michigan had double-digit percentage point declines in median home values from their
peaks in 2005 and 2006 to 2008 (Case, 2008). When I carry out the same analysis as
above with a group of states that had below average unemployment, including New
Hampshire, Louisiana, Vermont, and New Mexico, I do not find statistically significant
changes in college enrollment after the onset of the Great Recession.
These findings suggest that the lower opportunity cost of attending college due to
high unemployment for the age group 18-24 was the dominant effect. These findings are
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
similar to those from previous recessions, where college enrollment moved in the
24
opposite direction of the business cycle (Dellas and Sekallaris, 2003). However, there
exist other reasons that enrollment might have increased.
A significant limitation of my findings comes from the possibility that the Great
Recession was not a sudden disruption and families took measures to insure themselves
against this negative shock. The Great Recession began in the last quarter of 2007. While
people might have anticipated the event in 2006, it is unlikely. Multiple news outlets
declared a recession unlikely even in the last quarter of 2007, though the recession started
in December 2007. Headlines such as “If Credit Markets Thaw, Recession Unlikely” at
Bloomberg Business week characterized much of the news coverage (Cooper, 2007;
Panchuk, 2007). Further macroeconomic factors did not suggest that a recession was
coming. Appendix 2 shows the seasonally adjusted unemployment rate did not begin
rising until almost June of 2008, six months after the recession began.
Extraction of home equity before the recession might have increased enrollment. I
thus verified that families did not remove equity just before the Great Recession. This
would serve as evidence that they anticipated the recession. There was not a surge in
home equity loan balances in either 2006 or 2007 (see Appendix 1). Although this figure
shows a gradual increase in equity during the recession, much of this increase did not
come from the Black and Latino communities. Median wealth, much of it in the form of
home value, decreased by 68% for Latino households and 53% for Black households as
opposed to 16% for White households from 2005-2009 (Ellen & Dastrup, 2012). Instead
the increase seemed to be a correction in the housing market in less affected
neighborhoods, or non sub-prime markets.
25
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
Families might also have increased savings to finance college in expectation of
the coming recession. Thus the increase in college enrollment would be due to higher
savings rates. Personal savings rates did increase in 2005, but then dropped the following
year. Much of the significant increase occurred in 2008, which was during the recession
and not before.
In terms of the supply side for credit, domestic credit provided by the banking
sector decreased as a percentage of GDP, going from 244.4% of GDP in 2007 to 222% of
GDP in 2008 (World Bank, 2012). Thus not only did savings decrease but people also
had less access to credit. It is therefore unlikely that access to additional credit drove
increases in enrollment.
Providers of higher education might have also instituted policies that impacted the
demand for higher education, such as lowering tuition or increasing the amount of aid
disbursed. I thus verified that listed tuition prices and net prices, what families actually
pay, had not decreased, as lower prices might lead to increased enrollment. According to
College Board (2010), both net prices and list prices have increased steadily over the past
thirty years.
Conclusions and Implications
This analysis shows that the odds of enrollment in two-year institutions increased
after the onset of the Great Recession. Further studies should examine if and how the
Great Recession impacted post recession graduation rates. Did the students who entered
community college during this time complete their degrees? Did the additional education
lead to increased likelihood of employment? Increased enrollment and degree attainment
have positive implications for both individuals and societies. Government policy should
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
look at ways to ensure that prospective students and current enrollees have access to
26
adequate resources to complete their degree. Given the high levels of student debt from
college loans in existence today, it behooves stakeholders in the higher education sector
to think about ways to provide access to adequate financial resources for students,
particularly low-income and underrepresented students. The increase in the amount of
Pell Grants from the Higher Education Opportunity Act mentioned above is a first step.
For their part, institutions ought to look at how they can academically support the
students enrolled, with particular attention paid to their Black and Latino students.
Currently, Hispanic graduation rates from college remain some of the lowest in the
country (NCES, 2012). Thinking about ways to increase attainment for these students,
given that they represent a growing share of the population, is an endeavor that will yield
long-term benefits as enrollment from this population continues to increase.
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
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HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
Table 1: CPS summary statistics for 18- 24 years – before and
after the onset of the Great Recession
Mean for 18-24 Mean for 18-24
Variable
yr olds (2000-06) yr olds (2008-12)
Age
20.96
20.98
Female
0.50
0.50
Black
0.11
0.11
Asian
0.04
0.05
Native American
0.01
0.01
Other Race
0.01
0.01
Latino
0.16
0.17
Family Income
9.83
9.97
Own Home
0.55
0.55
Rent
0.43
0.43
In college
0.34
0.38
Attending 2 year coll.
0.09
0.11
Attending 4 year coll.
0.26
0.26
Observations
70,630
46,720
33
34
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
Table 2: OLS regression of population aged 18-24 years old in college
Dependent Variable: Attended Any College (incollpop)
(1)
Recession
High_Unemp
(2)
0.0140
(0.0073)
0.0231**
(0.0060)
0.0143*
(0.0061)
-0.0283
(0.0194)
-0.0812**
(0.0078)
0.0143
(0.0131)
-0.0487**
(0.0080)
0.0160
(0.0137)
-0.1558**
(0.0089)
0.0393**
(0.0148)
-0.1355**
(0.0077)
0.0337**
(0.0127)
0.3847**
(0.0072)
N
N
N
0.01
80,776
0.4194**
(0.0170)
Y
Y
Y
0.14
79,491
High_Unemp*Recession
Black
Recession*Black
High_Unemp*Black
(3)
0.0121
(0.0087)
0.0026
(0.0067)
0.0245*
(0.0106)
(4)
0.0138*
(0.0068)
-0.0419*
(0.0186)
0.0240**
(0.0088)
High_Unemp*Rec*Black
Latino
Recession*Latino
High_Unemp*Latino
High_Unemp*Rec*Latino
Constant
Covariates
Age FE
State FE
R2
N
0.3530**
(0.0068)
N
N
N
0.00
81,444
0.4199
(0.0161)
Y
Y
Y
0.14
79,491
(5)
(6)
0.0001
(0.0082)
-0.0023
(0.0091)
0.0372**
(0.0129)
-0.0467**
(0.0115)
0.0343*
(0.0142)
0.0221
(0.0159)
-0.0517*
(0.0233)
-0.1217**
(0.0091)
0.0397**
(0.0128)
0.0420**
(0.0125)
-0.0167
(0.0140)
0.2457**
(0.0123)
Y
N
N
0.06
79,491
0.0038
(0.0077)
-0.0456*
(0.0199)
0.0293*
(0.0126)
-0.0568**
(0.0120)
0.0283*
(0.0131)
0.0229
(0.0182)
-0.0344
(0.0272)
-0.1385**
(0.0093)
0.0356**
(0.0119)
0.0109
(0.0141)
-0.0100
(0.0150)
0.4324**
(0.0109)
Y
Y
Y
0.14
79,491
* p<0.05; ** p<0.01
Notes: The first and second models give the overall effect of the Great Recession on college enrollment as compared to pre-recession. They also look at
whether differential effects exist for Black and Latino student enrollment after the onset of the Great Recession, as compared to White students. The
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
35
third and fourth models explore how the Great Recession differentially impacted college enrollment in states with higher than average rates of
employment as compared to states with lower rates of unemployment. The fifth and sixth models account for whether there were differential effects for
Black and Latino enrollment, as compared to White students, in states with high unemployment during the Great Recession. The second, fourth, and
sixth models control for age, state fixed effects and contain all the covariates. Race in the CPS is based on self-identification. The four choices are
White, Black, American Indian, Eskimo or Aleut, Asian or Pacific Islander, and Other races. Latino affiliation, or Hispanic affiliation as it is called in
the CPS, is also based on self-identification. Further, this category includes people of all races. The full set of covariates include age, family income,
race, Hispanic status, and whether a family owns or rents their home. Standard errors are clustered on the level of the household to account for
multiple individuals within the same family unit. I only include results with weights for the sake of brevity, though unweighted results are
available and are similar to the results when using probability weights.
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
36
37
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
Table 3: OLS regression of population 18-24 years old attending a 4-year college
Dependent Variable: Attended a Four Year College (coll4yr)
(1)
Recession
High_Unemp
(2)
0.0015
(0.0082)
-0.0093
(0.0055)
0.0011
(0.0078)
-0.0278**
(0.0170)
-0.0766**
(0.0076)
0.0030**
(0.0110)
-0.0491**
(0.0052)
0.0038**
(0.0113)
-0.1423**
(0.0083)
0.0076**
(0.0118)
-0.1044**
(0.0082)
0.0037
(0.0106)
0.2970**
(0.0084)
N
N
N
0.02
80,776
0.2957**
(0.0112)
Y
Y
Y
0.09
79,934
High_Unemp*Recession
Black
Recession*Black
High_Unemp*Black
(3)
-0.0012
(0.0088)
-0.0194**
(0.0071)
0.0068
(0.0104)
(4)
-0.0002
(0.0077)
-0.0317
(0.0174)
0.0069
(0.0107)
High_Unemp*Rec*Black
Latino
Recession*Latino
High_Unemp*Latino
High_Unemp*Rec*Latin
Constant
Covariates
Age FE
State FE
R2
N
0.2645**
(0.0076)
N
N
N
0.00
81,444
0.2965**
(0.0101)
Y
Y
Y
0.10
79,491
(5)
(6)
-0.0056
(0.0099)
-0.0213*
(0.0086)
0.0157
(0.0151)
-0.0525**
(0.0088)
0.0116
(0.0112)
0.0224
(0.0155)
-0.0205
(0.0257)
-0.1123**
(0.0092)
0.0111
(0.0118)
0.0264**
(0.0083)
-0.0199
(0.0138)
0.3056**
(0.0100)
N
N
N
0.05
79,491
-0.0031
(0.0093)
-0.0394*
(0.0081)
0.0117
(0.0151)
-0.0561**
(0.0084)
0.0077
(0.0103)
0.0198
(0.0102)
-0.0111
(0.0279)
-0.1184**
(0.0101)
0.0110
(0.0116)
0.0347**
(0.0108)
-0.0184
(0.0164)
0.3899**
(0.0102)
Y
Y
Y
0.10
79,491
* p<0.05; ** p<0.01
Notes: The first and second models give the overall effect of the Great Recession on college enrollment as compared to pre-recession. They also look at
whether differential effects exist for Black and Latino student enrollment after the onset of the Great Recession, as compared to White students. The
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
38
third and fourth models explore how the Great Recession differentially impacted college enrollment in states with higher than average rates of
employment as compared to states with lower rates of unemployment. The fifth and sixth models account for whether there were differential effects for
Black and Latino enrollment, as compared to White students, in states with high unemployment during the Great Recession. The second, fourth, and
sixth models control for age, state fixed effects and contain all the covariates. Race in the CPS is based on self-identification. The four choices are
White, Black, American Indian, Eskimo or Aleut, Asian or Pacific Islander, and Other races. Latino affiliation, or Hispanic affiliation as it is called in
the CPS, is also based on self-identification. Further, this category includes people of all races. The full set of covariates include age, family income,
race, Hispanic status, and whether a family owns or rents their home. Standard errors are clustered on the level of the household to account for
multiple individuals within the same family unit. I only include results with weights for the sake of brevity, though unweighted results are
available and are similar to the results when using probability weights.
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
39
40
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
Table 4: OLS regression of population 18-24 years old attending a 2-year college
Dependent Variable: Attended a Two Year College (coll2yr)
(1)
Recession
High_Unemp
High_Unemp*Recession
Black
Recession*Black
High_Unemp*Black
(2)
0.0125**
(0.0034)
0.0324**
(0.0046)
0.0133**
(0.0036)
-0.0005
(0.0069)
-0.0046
(0.0047)
0.0113
(0.0064)
-0.0004
(0.0058)
0.0121
(0.0071)
-0.0135*
(0.0057)
0.0317**
(0.0073)
-0.0311**
(0.0062)
0.0300**
(0.0072)
0.0877**
(0.0035)
N
N
N
0.00
80,776
0.1237**
(0.0113)
Y
Y
Y
0.05
79,491
(3)
(4)
0.0133**
(0.0034)
0.0220**
(0.0044)
0.0177*
(0.0069)
0.0141**
(0.0038)
-0.0102
(0.0100)
0.0171**
(0.0059)
0.0886**
(0.0033)
N
N
N
0.00
81,444
0.1234**
(0.0111)
Y
Y
Y
0.05
79,491
High_Unemp*Rec*Black
Latino
Recession*Latino
High_Unemp*Latino
High_Unemp*Rec*Latino
Constant
Covariates
Age FE
State FE
R2
N
* p<0.05; ** p<0.01
(5)
(6)
0.0058
(0.0045)
0.0190**
(0.0045)
0.0215**
(0.0071)
0.0058
(0.0056)
0.0227**
(0.0083)
-0.0003
(0.0077)
-0.0312*
(0.0140)
-0.0094**
(0.0034)
0.0287**
(0.0083)
0.0156
(0.0086)
0.0031
(0.0140)
0.0974**
(0.0067)
N
N
N
0.01
79,491
0.0068
(0.0045)
-0.0063
(0.0095)
0.0176**
(0.0067)
-0.0007
(0.0055)
0.0206*
(0.0079)
-0.0031
(0.0093)
-0.0233
(0.0141)
-0.0201**
(0.0047)
0.0246**
(0.0082)
-0.0238**
(0.0066)
0.0084
(0.0110)
0.1557**
(0.0108)
Y
Y
Y
0.05
79,491
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
41
Notes: The first and second models give the overall effect of the Great Recession on college enrollment as compared to pre-recession. They also look at
whether differential effects exist for Black and Latino student enrollment after the onset of the Great Recession, as compared to White students. The
third and fourth models explore how the Great Recession differentially impacted college enrollment in states with higher than average rates of
employment as compared to states with lower rates of unemployment. The fifth and sixth models account for whether there were differential effects for
Black and Latino enrollment, as compared to White students, in states with high unemployment during the Great Recession. The second, fourth, and
sixth models control for age, state fixed effects and contain all the covariates. Race in the CPS is based on self-identification. The four choices are
White, Black, American Indian, Eskimo or Aleut, Asian or Pacific Islander, and Other races. Latino affiliation, or Hispanic affiliation as it is called in
the CPS, is also based on self-identification. Further, this category includes people of all races. The full set of covariates include age, family income,
race, Hispanic status, and whether a family owns or rents their home. Standard errors are clustered on the level of the household to account for
multiple individuals within the same family unit. I only include results with weights for the sake of brevity, though unweighted results are
available and are similar to the results when using probability weights.
42
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
Table 5: Multinomial logistic regression of population 18-24 years old
Dependent Variable: Attended College where 1=No College 2=2 Year College 3=4 Year College (collstat1)
(1)
(2)
(3)
(4)
(5)
2
Recession
High_Unemp
High_Unemp*Recess
Black
Recession*Blac
High_Unemp*Black
0.1628**
(0.0358)
0.3206**
(0.0441)
0.1780**
(0.0322)
1.1842**
(0.1196)
-0.1616**
(0.0473)
0.1190
(0.0640)
-0.0445
(0.0642)
0.1441
(0.0787)
-0.4015**
(0.0661)
0.3353**
(0.0806)
-0.6101**
(0.0737)
0.3661**
(0.0806)
0.0494
(0.0428)
-0.0044
(0.0283)
0.0577
(0.0421)
-0.1764
(0.1127)
-0.4241**
-0.2476**
0.1772**
(0.0417)
0.2151**
(0.0462)
0.1450*
(0.0649)
0.1923**
(0.0402)
1.0657**
(0.1350)
0.1848**
(0.0513)
0.0322
(0.0496)
-0.0832*
(0.0384)
0.0699
(0.0527)
0.0448
(0.0468)
0.1181
(0.1023)
0.0989
(0.0615)
High_Unemp*Rec*Black
Latino
Recession*Latino
High_Unemp*Lat
High_Unemp*Rec*Lat
3
Recession
High_Unemp
High_Unemp*Recess
Black
0.0764
(0.0445)
0.1740**
(0.04448)
0.2415**
(0.0612)
-0.0002
(0.0732)
0.2724**
(0.0942)
0.0501
(0.0940)
-0.3774**
(0.1369)
-0.3469**
(0.0553)
0.3933**
(0.0984)
0.2593**
(0.0951)
-0.1604
(0.1401)
-0.0051
(0.0480)
-0.0886*
(0.0432)
0.1384*
(0.0679)
-0. 2615**
(6)
0.0904**
(0.0443)
1.0865**
(0.1341)
0.2226**
(0.0571)
-0.0643
(0.0810)
0.2465*
(0.0978)
0.0561
(0.1283)
-0.2660
(0.1692)
-0.5464**
(0.0737)
0.3849**
(0.0932)
-0.0846
(0.0744)
-0.0995
(0.1117)
0.0123
(0.0504)
0.0870
(0.1042)
0.1292*
(0.0727)
-0.2836**
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
(0.0444)
(0.0333)
Recession*Bla
0.0246
0.0335
(0.0655)
(0.0707)
High_Unemp*Blac
43
High_Unemp*Rec*Bl
Latino
Recession*Lati
-0.9341**
(0.0517)
0.0996
(0.0841)
-0.8129**
(0.0550)
0.0949
(0.0813)
High_Unemp*Lat
High_Unemp*Rec*La
N
Covariates
Age FE
State FE
N
N
N
73,382
Y
Y
Y
72,199
N
N
N
73,991
Y
Y
Y
72,199
(0. 0577)
0.1001
(0.0701)
0.1209
(0.1011)
-0.1851
(0.1576)
-0.7664**
(0.0610)
0.1302
(0. 0806)
0.1726**
(0.0590)
-0.1362
(0.0842)
N
N
N
72,199
(0.0629)
0.0745
(0.0670)
0.1034
(0.1217)
-0.1158
(0.1928)
-0.8748**
(0.0650)
0.1405
(0.0793)
0.1585*
(0.0774)
-0.1267
(0.1068)
Y
Y
Y
72,199
*p<.05; ** p<0.01
Notes: The first and second models give the overall effect of the Great Recession on college enrollment as compared to pre-recession. They also look at
whether differential effects exist for Black and Latino student enrollment after the onset of the Great Recession, as compared to White students. The
third and fourth models explore how the Great Recession differentially impacted college enrollment in states with higher than average rates of
employment as compared to states with lower rates of unemployment. The fifth and sixth models account for whether there were differential effects for
Black and Latino enrollment, as compared to White students, in states with high unemployment during the Great Recession. The second, fourth, and
sixth models control for age, state fixed effects and contain all the covariates. Race in the CPS is based on self-identification. The four choices are
White, Black, American Indian, Eskimo or Aleut, Asian or Pacific Islander, and Other races. Latino affiliation, or Hispanic affiliation as it is called in
the CPS, is also based on self-identification. Further, this category includes people of all races. The full set of covariates include age, family income,
race, Hispanic status, and whether a family owns or rents their home. Standard errors are clustered on the level of the household to account for
multiple individuals within the same family unit. I only include results with weights for the sake of brevity, though unweighted results are
available and are similar to the results when using probability weights.
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
44
45
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
Table 6: Multinomial logistic regression of population 18-24 years old
Dependent Variable: Attended College where 1=No College 2=2 Year College 3=4 Year College (collstat1) No weights
2
Recession
High_Unemp
(1)
0.1535**
(0.0336)
0.3536**
(0.0420)
(2)
0.1592**
(0.0289)
1.2051**
(0.1201)
-0.1072
(0.0585)
0.0901
(0.0669)
-0.0476
(0.0823)
0.1207
(0.0771)
-0.3773**
(0.0645)
0.3137
(0.0824)
-0.5994**
(0.0706)
0.3379**
(0.0778)
0.0574
(0.0433)
0.0138
(0.0275)
0.0551
(0.0351)
0.1968
(0.1120)
-0.3670**
-0.2473**
High_Unemp*Recession
Black
Recession*Black
High_Unemp*Blac
(3)
0.1624**
(0.0364)
0.2387**
(0.0438)
0.1554*
(0.0606)
(4)
0.1648**
(0.0306)
1.0799**
(0.1370)
0.2005**
(0.0494)
0.0380
(0.0481)
-0.1012**
(0.0378)
0.0779
(0.0506)
0.0418
(0.0397)
-0.1297
(0.1049)
0.1148
(0.0571)
High_Unemp*Rec*Black
Latino
Recession*Latino
High_Unemp*Latino
High_Unemp*Rec*Latin
3
Recession
High_Unemp
High_Unemp*Recession
Black
(5)
0.0785*
(0.0339)
0.1913**
(0.0366)
0.2355**
(0.0532)
0.0228
(0.0934)
0.2407**
(0.0922)
0.0604
(0.0920)
-0.4031**
(0.1223)
-0.3116**
(0.0558)
0.3470**
(0.0977)
0.2409**
(0.0590)
-0.1178
(0.1197)
0.0030
(0.0406)
-0.1014**
(0.0342)
0.1463*
(0.0627)
-0.2382**
(6)
0.0914**
(0.0357)
1.1037**
(0.1359)
0.2221**
(0.0518)
-0.0618
(0.1085)
0.2101*
(0.1013)
0.0619
(0.1247)
-0.2915
(0.1557)
-0.5400
(0.0728)**
0.3356**
(0.0957)
-0.0688
(0.0521)
-0.0838
(0.1130)
0.0185
(0.0410)
0.0859
(0.1056)
0.1372*
(0.0664)
-0.2806
46
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
(0.0316)
(0.0318)
Recession*Black
0.0102
0.0348
(0.0453)
(0.0458)
High_Unemp*Blac
High_Unemp*Rec*Blac
Latino
Recession*Latino
-0.9530**
(0.0419)
0.0906
(0.0770)
-0.8618**
(0.0430)
0.0943
(0.0669)
High_Unemp*Latino
High_Unemp*Rec*Latin
N
Covariates
Age FE
State FE
N
N
N
73,382
Y
Y
Y
72,199
N
N
N
73,991
Y
Y
Y
72,199
(0.0524)
0.0802
(0.0572)
0.1197
(0.1150)
-0.1706
(0.1633)
-0.8131**
(0.0547)
0.1185
(0. 0701)
0.2000**
(0.0648)
-0.1177
(0.0956)
N
N
N
72,199
(0.0636)**
0.0652
(0.0594)
0.1182
(0.1356)
-0.1135
(0.1875)
-0.9333**
(0.0548)
0.1261
(0.0671)
0.2109
(0.0784)
-0.1203
(0.1179)
Y
Y
Y
72,199
*p<.05; ** p<0.01
Notes: The first and second models give the overall effect of the Great Recession on college enrollment as compared to pre-recession. They also look at
whether differential effects exist for Black and Latino student enrollment after the onset of the Great Recession, as compared to White students. The
third and fourth models explore how the Great Recession differentially impacted college enrollment in states with higher than average rates of
employment as compared to states with lower rates of unemployment. The fifth and sixth models account for whether there were differential effects for
Black and Latino enrollment, as compared to White students, in states with high unemployment during the Great Recession. The second, fourth, and
sixth models control for age, state fixed effects and contain all the covariates. Race in the CPS is based on self-identification. The four choices are
White, Black, American Indian, Eskimo or Aleut, Asian or Pacific Islander, and Other races. Latino affiliation, or Hispanic affiliation as it is called in
the CPS, is also based on self-identification. Further, this category includes people of all races. The full set of covariates include age, family income,
race, Hispanic status, and whether a family owns or rents their home. Standard errors are clustered on the level of the household to account for
multiple individuals within the same family unit.
47
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
Table 7: Multinomial logistic regression of population 18-24 years old with continuous unemployment
Dependent Variable: Attended College where 1=No College 2=2 Year College 3=4 Year College (collstat1)
(1)
(2)
(3)
(4)
(5)
2
Recession
Unempchg
Unempchg*Recess
Black
Recession*Blac
Unempchg*Black
0.1654**
(0.0356)
0.1417**
(0.0155)
0.1780**
(0.0322)
0.3313
(0.2318)
-0.1692**
(0.0457)
0.1178
(0.0624)
-0.0445
(0.0642)
0.1441
(0.0787)
-0.4214**
(0.0672)
0.3335**
(0.0838)
-0.6101**
(0.0737)
0.3661**
(0.0806)
0.0494
(0.0429)
0.0150
(0.0119)
0.0577
(0.0421)
-0.4920**
(0.1910)
-0.4249**
-0.2476**
-0.1126
(0.0925)
0.0915**
(0.0174)
0.0738**
(0.0192)
-0.1271
(0.0733)
0.2737
(0.2343)
0.0830**
(0.0103)
-0.1424
(0.0874)
-0.0265*
(0.0121)
0.0435**
(0.0162)
-0.1873**
(0.0936)
-0.5266**
(0.1939)
0.0583**
(0.0204)
Unempchg*Rec*Black
Latino
Recession*Latino
Unempchg*Lat
Unempchg*Rec*Lat
3
Recession
Unempchg
Unempchg*Recess
Black
-0.3406**
(0.0445)
0.0879**
(0.0210)
0.1073**
(0.0224)
-0.2334
(0.1954)
0.5328*
(0.2329)
0.0149
(0.0432)
-0.0891
(0.0509)
-0.6598**
(0.1145)
0.8669**
(0.1702)
0.0508**
(0.0250)
-0.1125**
(0.0315)
-0.2669**
(0.0793)
-0.0225
(0.0121)
0.0697**
(0.0150)
-0. 7325**
(6)
-0.3169**
(0.0954)
0.2728
(0.2324)
0.1057**
(0.0188)
-0.1836
(0.2404)
0.3560
(0.2535)
0.0308
(0.0542)
-0.0465
(0.0579)
-0.6867**
(0.1313)
0.8288**
(0.1636)
0.0202
(0.0254)
-0.0994**
(0.0316)
-0.3057**
(0.0884)
-0.5361**
(0.1974)
0.0800**
(0.0206)
-0.5111**
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
(0.0440)
(0.0333)
Recession*Bla
0.0251
0.0335
(0.0654)
(0.0707)
Unempchg *Blac
48
Unempchg *Rec*Bl
Latino
Recession*Lati
-0.9395**
(0.0526)
0.1002
(0.0843)
-0.8129**
(0.0550)
0.0949
(0.0813)
Unempchg *Lat
Unempchg *Rec*La
N
Covariates
Age FE
State FE
N
N
N
73,382
Y
Y
Y
72,199
N
N
N
73,991
Y
Y
Y
72,199
(0. 1400)
0.5796**
(0.1838)
0.0670**
(0.0265)
-0.1213**
(0.0383)
-1.0250**
(0.1070)
0.3207*
(0. 1283)
0.0201
(0.0260)
-0.0501
(0.0321)
N
N
N
72,199
(0.1692)
0.4788*
(0.2091)
0.0577
(0.0319)
-0.0976**
(0.0471)
-0.9334**
(0.1295)
0.3222
(0.1653)
0.0279*
(0.0281)
-0.0521
(0.0396)
Y
Y
Y
72,199
*p<.05; ** p<0.01
Notes: The first and second models give the overall effect of the Great Recession on college enrollment as compared to pre-recession. They also look at
whether differential effects exist for Black and Latino student enrollment after the onset of the Great Recession, as compared to White students. The
third and fourth models explore how the Great Recession differentially impacted college enrollment in states with higher than average rates of
employment as compared to states with lower rates of unemployment. The fifth and sixth models account for whether there were differential effects for
Black and Latino enrollment, as compared to White students, in states with high unemployment during the Great Recession. The second, fourth, and
sixth models control for age, state fixed effects and contain all the covariates. Race in the CPS is based on self-identification. The four choices are
White, Black, American Indian, Eskimo or Aleut, Asian or Pacific Islander, and Other races. Latino affiliation, or Hispanic affiliation as it is called in
the CPS, is also based on self-identification. Further, this category includes people of all races. The full set of covariates include age, family income,
race, Hispanic status, and whether a family owns or rents their home. Standard errors are clustered on the level of the household to account for
multiple individuals within the same family unit. I only include results with weights for the sake of brevity, though unweighted results are
available and are similar to the results when using probability weights.
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
49
Graph 1: Change in percent unemployed and percent enrolled in college from
2006 to 2009 by State
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
Appendix 1: Federal Reserve Bank of NY: Quarterly Report on Household debt and
credit November 2011 (99Q1: 11Q1)
Source: Federal Reserve Bank of New York, 2011
50
51
HAS THE GREAT RECESSION DECREASED COLLEGE ENROLLMENT?
Appendix 2: Seasonally adjusted unemployment rate for 16 years and over from the
Current Population Survey 2005-2011
Data extracted on: November 20, 2012 (11:29:14 AM)
Year
2005
2006
2007
2008
2009
2010
2011
Jan
5.3
4.7
4.6
5.0
7.8
9.7
9.1
Feb
5.4
4.8
4.5
4.9
8.3
9.8
9.0
Mar
5.2
4.7
4.4
5.1
8.7
9.8
8.9
Apr May
5.2
5.1
4.7
4.6
4.5
4.4
5.0
5.4
8.9
9.4
9.9
9.6
9.0
9.0
Jun
5.0
4.6
4.6
5.6
9.5
9.4
9.1
Jul
5.0
4.7
4.7
5.8
9.5
9.5
9.1
Aug
4.9
4.7
4.6
6.1
9.6
9.6
9.1
Sep
5.0
4.5
4.7
6.1
9.8
9.5
9.0
Oct
5.0
4.4
4.7
6.5
10.0
9.5
8.9
Nov
5.0
4.5
4.7
6.8
9.9
9.8
8.7
Dec
4.9
4.4
5.0
7.3
9.9
9.4
8.5