Academic journal article Economic Review - Federal Reserve Bank of Kansas City

The Importance of Community Colleges to the Tenth District Economy

Academic journal article Economic Review - Federal Reserve Bank of Kansas City

The Importance of Community Colleges to the Tenth District Economy

Article excerpt

The recent recession and now the recovery have caused enrollment at many community colleges to soar as unemployed workers retrain for new occupations and students who might otherwise attend a four-year college choose to save money. In the Tenth District, the importance of community colleges is likely to rise even further as the economy continues to evolve and industries demand workers with new skills.

Labor market projections over the next decade suggest that new jobs in the district will be filled more by workers with an associate's degree or some college than by those with any other type of education. In the short run, with state and local government funding still falling, many community colleges will be challenged to educate a growing number of students. In the long run, evolving industries will likely further challenge community colleges to produce even more workers with newer skills-both nationwide and in the Tenth District.

This article examines how the Tenth District's reliance on community colleges is likely to grow in the years ahead. The first section describes trends in community college education and details how these colleges contribute to economic development in the Tenth District. The second section explores the challenges associated with economic downturns: rising enrollment and shrinking government revenues. The third section examines the implications of long-run job projections in district states for the demand for community colleges graduates-and whether the states' current level of provision for community college education appears adequate.


Over the past half century, many community colleges have adapted to the evolving educational needs of the population amid continually changing economic conditions. Collectively, these colleges have played an increasingly important role in higher education and have therefore become a key resource for economic growth in the communities they serve.

Who uses community colleges and why?

The role of community colleges has grown over the years as they have broadened their range of educational offerings to satisfy a greater and more diverse group of students.1 Community colleges were founded around the turn of the 20th century to provide a more affordable path to a bachelor's degree. Students could earn a two-year associate's degree at a local school and then transfer to a more traditional four-year university to finish their higher education. Today, community colleges also provide an opportunity for high school students to earn college credit, a place to obtain a vocational skill, to earn certification or other training for a career change, and to develop life skills.

Nationwide, the percentage of post-secondary students attending two-year colleges has more than doubled over the last half century. Enrollment jumped from 17.8 percent of college students nationwide in 1963 to 36.5 percent in 2008 (Digest of Education Statistics).2 Although community colleges play an important role in every state, over time some states have focused more heavily than others on developing their community college systems.3 In California, New Mexico, and Wyoming, more than 55 percent of all post-secondary students attended community colleges in 2008, compared to less than 15 percent in Alaska, South Dakota, Nevada, and North Dakota.

Today's community colleges also serve a diverse student body. Female and minority students make up a larger share of the Tenth District's community college student body than at district four-year colleges (Integrated Postsecondary Education Data System).4 In addition, community colleges in the district have a much higher percentage of students over the age of 25 and enrolled part time.5

By offering a wide variety of courses ranging from single classes to two-year programs, community colleges offer students a variety of benefits. Perhaps the most common reason that students attend community colleges is to increase their earnings potential. …

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