Community Colleges and Economic Mobility

By Kolesnikova, Natalia A. | Federal Reserve Bank of St. Louis Review, January-February 2010 | Go to article overview

Community Colleges and Economic Mobility


Kolesnikova, Natalia A., Federal Reserve Bank of St. Louis Review


This paper examines the role of community colleges in the U.S. higher education system and their advantages and shortcomings. In particular, it discusses the population of community college students and economic returns to community college education for various demographic groups. It offers new evidence on the returns to an associate's degree. Furthermore, the paper uses data from the National Survey of College Graduates to compare educational objectives, progress, and labor market outcomes of individuals who start their postsecondary education at community colleges with those who start at four-year colleges. Particular attention is paid to the Federal Reserve's Eighth District, the geographic area served by the Federal Reserve Bank of St. Louis. (JEL I20, I21, J30)

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Joliet Junior College (Joliet, Illinois), the oldest community college in the nation, was founded in 1901. Since then, community colleges have become increasingly important for the U.S. education and training system. Today, 11.5 million students (6.5 million of whom are studying for college credits) are enrolled in almost 1,200 community colleges, according to the American Association of Community Colleges. Community college students constitute a remarkable 46 percent of all U.S. undergraduates.

The term "junior college" originally referred to any two-year, postsecondary school. Over the last few decades, the term "community college" became more popular to describe public two-year institutions as it better conveys the mission of these colleges to serve their local communities. This distinction was not prevalent before the 1980s and the two terms are still often used interchangeably. However, in 1992 the American Association of Junior Colleges did change its name to the American Association of Community Colleges.

The original goal of two-year colleges was to prepare students, through an associate's degree (AD) program, to transfer to a four-year college. Over time, the purpose evolved to include workforce training programs, schooling toward certification in areas such as nursing and other professions, and adult continuing education classes. A more recent development is that some community colleges now offer bachelor's degrees in a number of fields.

However, there are big differences across states in how the community college system is used. Rouse (1998) found evidence suggesting that states tend to focus their resources on either a community college or a four-year college system. California has the largest network of the former; 66 percent of the state's current undergraduates attend community colleges. In contrast, only 16 percent of undergraduates in Nevada and Vermont are enrolled in community colleges. (1)

Among the states within the Federal Reserve System's Eighth District (which consists of all of Arkansas and parts of Missouri, Mississippi, Illinois, Indiana, Tennessee, and Kentucky) Illinois and Mississippi have the largest proportion of undergraduates--about half--in community colleges. Indiana has the lowest percentage--19 percent. Table 1 summarizes enrollment statistics for the Eighth District states.

For many individuals, community colleges represent a unique opportunity to receive a postsecondary education and improve their economic status. Community colleges thus serve as a path to upward economic mobility for a large part of the population. Given the significant role community colleges in U.S. higher education, it is important to have as much information as possible about community college students, their goals, educational choices, and outcomes. This paper concentrates on several of these topics and attempts to present a comprehensive picture of community college education. In particular, it addresses the following questions:

* What are the advantages of community colleges compared with traditional four-year colleges?

* Do students attending community colleges differ from students at traditional four-year colleges? …

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