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Community college enrollments decline in response to state-level minimum wage increases, according to a new working paper released by the National Bureau of Economic Research Monday. However, minimum wage changes had little effect on degree attainment, the paper said.
The study detailed in the paper found that enrollment at two-year institutions dropped by 4 percent in the year following a significant state-level minimum wage increase. Furthermore, enrollment at these colleges remained down for five years after a minimum wage hike.
Part-time students at community colleges were most affected by these shifts. Enrollment among these students dropped 6 percent the year after a minimum wage increase and remained at that lower enrollment for five years after. Meanwhile, four-year institutions’ enrollments didn’t significantly change in response to wage increases. Minimum wage increases also had no notable impact on credential and degree attainment, except for a slight effect on associate degree attainment among women.
The paper notes that many factors play a role in community college enrollment trends but state-level minimum wage increases could be contributing to declines.
“Whether the decline in community college enrollment caused by increases in minimum wages ultimately hurts (or helps) workers depends on whether workers forgo skill attainment and how such skills would have been valued by the labor market,” the paper says.
