IDEAS home Printed from https://ideas.repec.org/a/eee/ecoedu/v45y2015icp53-63.html
   My bibliography  Save this article

Why has for-profit colleges’ share of higher education expanded so rapidly? Estimating the responsiveness to labor market changes

Author

Listed:
  • Gilpin, Gregory A.
  • Saunders, Joseph
  • Stoddard, Christiana

Abstract

Over the last two decades, for-profit colleges (FPCs) have substantially increased their share of the higher education market. One potential explanation is that FPC sector may be more responsive to labor market changes than public competitors. Using panel datasets of Associate's degree students, we examine the effects of changes in labor market conditions across various employment fields on enrollment and degree completion in related majors. The results indicate that enrollment and degree completion in the FPC sector is positively related to employment growth and wages in related occupations, while public institutions remain largely unresponsive. Heterogeneity analysis reveals that these relationships are similar across groups of students by gender and ethnicity. Furthermore, the results also indicate that students in public institutions are non-responsive to changes in labor markets associated with requiring an Associate's or Bachelor's degree.

Suggested Citation

  • Gilpin, Gregory A. & Saunders, Joseph & Stoddard, Christiana, 2015. "Why has for-profit colleges’ share of higher education expanded so rapidly? Estimating the responsiveness to labor market changes," Economics of Education Review, Elsevier, vol. 45(C), pages 53-63.
  • Handle: RePEc:eee:ecoedu:v:45:y:2015:i:c:p:53-63
    DOI: 10.1016/j.econedurev.2014.11.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0272775714001150
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rajeev Darolia & Cory Koedel & Paco Martorell & Katie Wilson & Francisco Perez‐Arce, 2015. "Do Employers Prefer Workers Who Attend For‐Profit Colleges? Evidence from a Field Experiment," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 34(4), pages 881-903, September.
    2. repec:fth:prinin:366 is not listed on IDEAS
    3. David J. Deming & Claudia Goldin & Lawrence F. Katz, 2012. "The For-Profit Postsecondary School Sector: Nimble Critters or Agile Predators?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 139-164, Winter.
    4. Cellini, Stephanie Riegg, 2012. "For-Profit Higher Education: An Assessment of Costs and Benefits," National Tax Journal, National Tax Association;National Tax Journal, vol. 65(1), pages 153-179, March.
    5. J.-P. Boissin & A. Fayolle & Karim Messeghem, 2012. "Editorial," Post-Print halshs-00783612, HAL.
    6. Chung, Anna S., 2012. "Choice of for-profit college," Economics of Education Review, Elsevier, vol. 31(6), pages 1084-1101.
    7. David Card & Alan B. Krueger, 1996. "School Resources and Student Outcomes: An Overview of the Literature and New Evidence from North and South Carolina," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 31-50, Fall.
    8. Lang, Kevin & Weinstein, Russell, 2013. "The wage effects of not-for-profit and for-profit certifications: Better data, somewhat different results," Labour Economics, Elsevier, vol. 24(C), pages 230-243.
    9. Berger, Mark C. & Kostal, Thomas, 2002. "Financial resources, regulation, and enrollment in US public higher education," Economics of Education Review, Elsevier, vol. 21(2), pages 101-110, April.
    10. Sandra E. Black & Amir Sufi, 2002. "Who Goes to College? Differential Enrollment by Race and Family Background," NBER Working Papers 9310, National Bureau of Economic Research, Inc.
    11. Julian R. Betts & Laurel L. McFarland, 1995. "Safe Port in a Storm: The Impact of Labor Market Conditions on Community College Enrollments," Journal of Human Resources, University of Wisconsin Press, vol. 30(4), pages 741-765.
    12. Harris Dellas & Plutarchos Sakellaris, 2003. "On the cyclicality of schooling: theory and evidence," Oxford Economic Papers, Oxford University Press, vol. 55(1), pages 148-172, January.
    13. David Card & Alan Krueger, 1996. "School Resources and Student Outcomes: An Overview of the Literature and New Evidence from North and South Carolina," Working Papers 745, Princeton University, Department of Economics, Industrial Relations Section..
    14. Sakellaris, Plutarchos & Spilimbergo, Antonio, 2000. "Business cycles and investment in human capital: international evidence on higher education," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 52(1), pages 221-256, June.
    15. Freeman, James A. & Hirsch, Barry T., 2008. "College majors and the knowledge content of jobs," Economics of Education Review, Elsevier, vol. 27(5), pages 517-535, October.
    16. Rajeev Darolia & Cory Koedel & Paco Martorell & Katie Wilson & Francisco Perez‐Arce, 2015. "Do Employers Prefer Workers Who Attend For‐Profit Colleges? Evidence from a Field Experiment," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 34(4), pages 881-903, September.
    17. Webbink, Dinand & Hartog, Joop, 2004. "Can students predict starting salaries? Yes!," Economics of Education Review, Elsevier, vol. 23(2), pages 103-113, April.
    18. Cellini, Stephanie Riegg & Chaudhary, Latika, 2014. "The labor market returns to a for-profit college education," Economics of Education Review, Elsevier, vol. 43(C), pages 125-140.
    19. Stephanie Riegg Cellini, 2009. "Crowded Colleges and College Crowd-Out: The Impact of Public Subsidies on the Two-Year College Market," American Economic Journal: Economic Policy, American Economic Association, vol. 1(2), pages 1-30, August.
    20. Kevin Lang & Russell Weinstein, 2012. "Evaluating Student Outcomes at For-Profit Colleges," NBER Working Papers 18201, National Bureau of Economic Research, Inc.
    21. Julian R. Betts, 1996. "What Do Students Know about Wages? Evidence from a Survey of Undergraduates," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 27-56.
    22. Chung, Anna, 2008. "For-Profit Student Heterogeneity," MPRA Paper 18967, University Library of Munich, Germany, revised Nov 2009.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Luis Armona & Rajashri Chakrabarti & Michael Lovenheim, 2017. "How does for-profit college attendance affect student loans, defaults, and labor market outcomes?," Staff Reports 811, Federal Reserve Bank of New York.
    2. Dillender, Marcus & Friedson, Andrew & Gian, Cong & Simon, Kosali, 2019. "Does the healthcare educational market respond to short-run local demand?," Economics of Education Review, Elsevier, vol. 73(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stephanie R. Cellini & Rajeev Darolia & Lesley J. Turner, 2020. "Where Do Students Go When For-Profit Colleges Lose Federal Aid?," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 46-83, May.
    2. Jacqmin, Julien, 2014. "The Emergence of For-Profit Higher Education Institutions," MPRA Paper 59299, University Library of Munich, Germany.
    3. Luis Armona & Rajashri Chakrabarti & Michael Lovenheim, 2017. "How does for-profit college attendance affect student loans, defaults, and labor market outcomes?," Staff Reports 811, Federal Reserve Bank of New York.
    4. Cellini, Stephanie Riegg & Chaudhary, Latika, 2014. "The labor market returns to a for-profit college education," Economics of Education Review, Elsevier, vol. 43(C), pages 125-140.
    5. Rajeev Darolia, 2015. "Messengers of Bad News or Bad Apples? Student Debt and College Accountability," Education Finance and Policy, MIT Press, vol. 10(2), pages 277-299, March.
    6. Stephanie Riegg Cellini & Nicholas Turner, 2019. "Gainfully Employed?: Assessing the Employment and Earnings of For-Profit College Students Using Administrative Data," Journal of Human Resources, University of Wisconsin Press, vol. 54(2), pages 342-370.
    7. Bedard, Kelly & Herman, Douglas A., 2008. "Who goes to graduate/professional school? The importance of economic fluctuations, undergraduate field, and ability," Economics of Education Review, Elsevier, vol. 27(2), pages 197-210, April.
    8. Joselynn Hawkins Fountain, 2019. "The Effect of the Gainful Employment Regulatory Uncertainty on Student Enrollment at For-Profit Institutions of Higher Education," Research in Higher Education, Springer;Association for Institutional Research, vol. 60(8), pages 1065-1089, December.
    9. Rajeev Darolia & Cory Koedel & Paco Martorell & Katie Wilson & Francisco Perez‐Arce, 2015. "Do Employers Prefer Workers Who Attend For‐Profit Colleges? Evidence from a Field Experiment," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 34(4), pages 881-903, September.
    10. Jepsen, Christopher & Mueser, Peter R. & Jeon, Kyung-Seong, 2016. "The Benefits of Alternatives to Conventional College: Labor-Market Returns to Proprietary Schooling," IZA Discussion Papers 10007, Institute of Labor Economics (IZA).
    11. Jennifer L. Steele & Peter Buryk & Geoffrey McGovern, 2018. "Student Veterans’ Outcomes by Higher Education Sector: Evidence from Three Cohorts of the Baccalaureate and Beyond," Research in Higher Education, Springer;Association for Institutional Research, vol. 59(7), pages 866-896, November.
    12. Lau, Christopher V., 2020. "Are federal student loan accountability regulations effective?," Economics of Education Review, Elsevier, vol. 75(C).
    13. Webber, Douglas A., 2017. "Risk-sharing and student loan policy: Consequences for students and institutions," Economics of Education Review, Elsevier, vol. 57(C), pages 1-9.
    14. Veronica Minaya & Brendan Moore & Judith Scott-Clayton, 2020. "The Effect of Job Displacement on College Enrollment: Evidence from Ohio," NBER Working Papers 27694, National Bureau of Economic Research, Inc.
    15. Schweri, Juerg & Hartog, Joop, 2017. "Do wage expectations predict college enrollment? Evidence from healthcare," Journal of Economic Behavior & Organization, Elsevier, vol. 141(C), pages 135-150.
    16. Diana Alessandrini & Stephen Kosempel & Thanasis Stengos, 2012. "The Business Cycle Human Capital Accumulation Nexus and its Effect on Labor Supply Volatility," Working Paper series 62_12, Rimini Centre for Economic Analysis.
    17. Freeman, James A. & Hirsch, Barry T., 2008. "College majors and the knowledge content of jobs," Economics of Education Review, Elsevier, vol. 27(5), pages 517-535, October.
    18. Lang, Kevin & Weinstein, Russell, 2013. "The wage effects of not-for-profit and for-profit certifications: Better data, somewhat different results," Labour Economics, Elsevier, vol. 24(C), pages 230-243.
    19. Dimitrios Varvarigos, 2013. "Endogenous Cycles and Human Capital," Discussion Papers in Economics 13/18, Division of Economics, School of Business, University of Leicester.
    20. Fabio Méndez & Facundo Sepúlveda, 2012. "The Cyclicality of Skill Acquisition: Evidence from Panel Data," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(3), pages 128-152, July.

    More about this item

    Keywords

    Enrollment; Community colleges; Degree completion; For-profit colleges;
    All these keywords.

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • I2 - Health, Education, and Welfare - - Education
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecoedu:v:45:y:2015:i:c:p:53-63. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Haili He). General contact details of provider: http://www.elsevier.com/locate/econedurev .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.