The ongoing economic crisis has had a broad range of effects on community colleges in the United States. Cuts in state and local funding have hit public community colleges hard, even as rising unemployment has lead to increased enrollment at such institutions. These trends can have a positive long-term effect on regional growth, as human capital rises with education levels, and greater levels of human capital can push up wages. But if state investments in postsecondary education continue to decline, what are the potential long-term effects?

A 2012 study published in the Sociology of Education, “Community Colleges, Budget Cuts, and Jobs: The Impact of Community Colleges on Employment Growth in Rural U.S. Counties, 1976-2004,” examines the role of community colleges on local job growth. The researchers, from Washington State University, based their research on community colleges in 2,017 rural counties in 44 U.S. states between 1976 and 2004.

The findings include:

• Counties with an established community college or university experienced significantly more job growth than those without one. At the same time, new community colleges did not make a significant contribution to employment growth. “This finding lends support to the belief that local economic benefits provided by community colleges and other educational facilities occur over time.”
• State funding of community colleges fell significantly from 1981 to 2001, dropping from 48.5% in 1981 to 39.7% in 2001. “This decline was not offset by increased federal and local appropriations; this source of revenues also made a declining contribution. Instead, community colleges grew increasingly dependent on tuition and fees (increased from 14.7% in 1981 to 19.5% of total revenues in 2001).”
• Cuts in state funding were challenging for all community colleges, but those that served rural areas were the most vulnerable. Disadvantaged residents also suffer, as schools’ greater reliance on tuition and fees reduces their ability to pursue advanced education. “For the least affluent, the United States no longer provides ready access to community colleges; postsecondary education now comes with indebtedness. It should come as no surprise that the least affluent families incur more debt and have greater difficulty repaying loans.”
• Counties where state appropriations for community colleges fell the fastest suffered significant decreases in employment.

“Our findings suggest that state appropriations may have been the most effective means for community colleges to contribute to local employment growth. When state appropriations constituted the lion’s share of revenues, community colleges made a significant and positive contribution to employment growth,” the authors state. “With state appropriations representing a smaller and still shrinking share of revenues, community colleges no longer make a positive contribution to local employment growth.

The authors state that “from 1960 to 1980, the United States displayed a commitment to education, reflected in the construction of community colleges across the country….” To provide comparative policy context, the study notes that “by contrast, the latter decades of the twentieth century (1980-2000) witnessed an unrelenting commitment to incarceration and prison building … with a turn away from community colleges.”

A related 2012 paper in the Annual Review of Sociology, “Social and Economic Returns to College Education in the United States,” notes that “degrees and certificates from two-year colleges boost the earnings for the students who complete such programs and perhaps for students who complete only part of their program.”

Tags: higher education, rural