Post-Secondary Education Decisions During a Recession

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Post-Secondary Education Decisions During a Recession

Economic downturns affect certification programs and apprenticeships differently. While enrollment in certification programs (and college enrollments in general) tend to increase during recessions, apprenticeship programs are likely to decrease during and after the economic decline.

Post-Secondary Education

  • Research suggests that college enrollments respond to economic trends and are usually countercyclical; meaning, post-secondary enrollment tends to increase during economic downturns, mostly reflecting older adults displaced from the workforce seeking new or further training.
  • Nearly half of college-bound high school students reported that the recession changed their plans, as they sought less expensive educational options, including community colleges. The National Student Clearinghouse Research Center notes that there are differences between the behavior of traditional-age students and older students.
  • During the Great Recession, the number of enrollments increased abruptly around the onset of the recession in 2007, with much slighter increases in the following years (2008 to 2010). For first time students, the total number increased in 2007, hit its peak in 2009, and declined in 2010, as reported by the National Student Clearinghouse Research Center.
  • A higher number of students opted to enroll in two-year colleges, causing an enrollment surge in the two-year sector in 2009, primarily attributed to financial reasons and the “enhanced structural capacity and intentional community outreach activities.” This led to an 8.3% enrollment increase between the 2008 and 2009 cohorts, followed by a 5.1% decrease in 2010.
  • For students ages 40 to 64, the countercyclical trend is more apparent, as 1.9 million were enrolled in college or university in 2007, rising to 2.3 million by 2011 and then dropping as the economy recovered. These students, however, were less likely to complete their education than their younger counterparts.

How Economic Downturns Affect Apprenticeship Programs

  • According to a study published by the Organisation for Economic Co-operation and Development (OECD), the effects of an economic downturn on apprenticeship programs depend on whether the recession has a temporary or prolonged effect (real and perceived). Temporary recessions tend to have a larger impact on shorter training programs than apprenticeships.
  • When the economic downturn is perceived as temporary, meaning the current output declines, but the future expected output is unchanged, the absolute number of apprentices are likely to fall. Still, the ratio of apprentices to employees can increase, considering companies may anticipate that recruiting workers in the future may be more expensive than training them now.
  • In a prolonged downturn, the perspective shifts, as both the current and future periods are being affected. The recruitment costs are likely to fall in the future, as more qualified people are likely to be available due to the unemployment rates. For that reason, hiring labor straight from the market, if and when the need arises, becomes cheaper and more convenient.
  • Furthermore, the future scale of production is reduced, therefore, the need for skilled workers is reduced, regardless of whether they are trained inside the company or recruited. In cases where there is a prolonged shock, such as the Great Recession of 2008, hoarding labor may no longer be a viable option, affecting negatively both the number and ratio of apprentices to employees to a much larger extent.
  • In fact, the recession significantly impacted the number of new apprenticeships. A study analyzed apprenticeship enrollment in 10 states and reported a 39% decline in enrollments when comparing figures from 2000 to 2010.
  • The recession that began in late 2007 caused the numbers to drop rapidly, and rather than decreasing each year consistently, there were significant fluctuations, resulting in considerably fewer admissions in 2010.
  • The demographic profile of the apprentices also showed differences in the pre- and post-recession years. The share of young people on apprenticeship programs declined post-recession, while the number of apprentices over 40 increased. The share of White apprentices took a hit, while the share of Hispanic and Black apprentices grew.
  • National numbers revealed a similar movement. In 2008, there were 132,782 new apprentices and 442,386 active apprentices, while 2010 saw a decline in those numbers, registering 387,720 active apprentices and 109,989 new apprentices.
  • The numbers continued to decrease in 2011 (357,692). In 2012 and 2013, the numbers stabilized (362,123 and 375, 425 respectively) and started to rise again in 2014 (410,375).
  • One interesting aspect of the recession is related to the number of active apprenticeship programs. In 2008 there were 24,285 active programs; in 2010, the number of programs increased to 25,961. However, in the years following the official end of the recession, the number of active programs started to plummet, hitting 19,260 in 2014. They are yet to reach pre-recession numbers, with 23,441 active programs in 2018.

How Economic Downturns Affect Certification Programs

  • Workers with non-degree, vocational certificates tend to lose their jobs when recessions hit their industries, however, they also tend to be the first to find new employment when conditions improve.
  • During the recession, many individuals altered their pursuits due to the lowered expectations brought by the new scenario. Research suggests that those who adjusted past educational expectations to “the reality of their situations (a group with a propensity to shift from Bachelor’s degree aspirations to Associate’s or Vo-Tech degrees) fared well in terms of income and employment during the recession.”
  • Following the same trend as college enrollments, the number of certificates conferred below the associate’s level increased by 87% between 2000 and 2010 (from 553,000 to 1 million). The numbers started to decline in the following years, decreasing by 8% between 2010 and 2017 (from 1 million to 945,000).
  • Overall, those with vocational certification were significantly affected by the recession in multiple categories, particularly regarding predicted weekly hours, probability of employment, and job security. However, they also rebounded faster and better than those with “Some college” or "High School or less. They even surpassed those with Bachelor’s degrees when it comes to job security in the aftermath of the Great Recession.

Research Strategy

Given the historical nature of the project, we expanded the date scope of our sources to include older studies with relevant analysis and data from the recession period.
Sources
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