Date of Award

6-2010

Document Type

Union College Only

Degree Name

Bachelor of Arts

Department

Economics

First Advisor

Lewis Davis

Language

English

Keywords

college, community, state, government, tuition

Abstract

Community colleges in the United States are particularly flexible in adapting to constantly changing labor market conditions and government funding cycles. This paper will identify the effects of these supply and demand side factors on community college enrollment quantities and tuition prices and predict the initial effects of President Obama’s American Graduation Initiative. This bill proposes $12 billion of government spending, through grants and financial aid, in order to increase the number of community college graduates by 5 million over the next ten years. The dependent variables in my equations are total college enrollment and tuition. Independent supply variables include revenues from federal, state and local grants and appropriations. On the demand side, independent variables include the average financial aid issued, state household income, state unemployment rate, skill premium, urban population, educated population, white population, average in-state public university tuition, and average in-state community college tuition. The sample is drawn from 2-year public colleges in the US from 2000-2008. The data is taken from the Integrated Postsecondary Education Data System survey, the Statistical Abstract of the United States, and the Bureau of Labor Statistics. Limitations regarding the endogeneity of government appropriations prevents the forecasting of government funding increases; however, the model predicts that financial aid increases from the American Graduation Initiative will increase community college enrollments by over half a million.

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