On the relationship between business cycle and college enrollment in the U.S.: a time series approach
DOI:
https://doi.org/10.17811/ebl.4.1.2015.7-16Abstract
We examine causality between business cycle and college enrollment in the United States using a macro-level data from 1970 to 2011. Autoregressive distributed lag (ARDL) bounds test and Johansen test for cointegration resulted in existence of a stable long-run cointegrating relationship among unemployment rate, per capita GDP, and college enrollment. We find unemployment rate to Granger cause college enrollment in both the short and the long run while GDP per capita to Granger cause college enrollment in the long run. These findings provide evidence for significant causal relationship between college enrollments and economic fluctuations.
References
Becker, G.S. (1993) Human capital: A theoretical and empirical analysis, with special reference to education, University of Chicago Press, Chicago.
Bedard, K. and Herman, D. A. (2008) Who goes to graduate/professional school? The importance of economic fluctuations, undergraduate field, and ability, Economics of Education Review, 27, 197-210.
Berger, M.C. and Kostal, T. (2002) Financial resources, regulation, and enrollment in US public higher education, Economics of Education Review, 21, 101-10.
Betts, J.R. and McFarland, L.L. (1995) Safe port in a storm: the impact of labor market conditions on community college enrollments, Journal of Human Resources, 30, 741-65.
BLS (2013) Bureau of Labor Statistics. United States Department of Labor. Available at www.data.bls.gov (accessed 5 October 2013).
Card, D. and Lemieux, T. (2001) Dropout and enrollment trends in the postwar period: what went wrong in the 1970s?, in Risky Behavior Among Youths: An Economic Analysis (Ed.) J. Gruber, University of Chicago Press, Chicago, pp. 439-82.
Dellas, H. and Koubi, V. (2003) Business cycles and schooling, European Journal of Political Economy, 19, 843-59.
Dellas, H. and Sakellaris, P. (2003) On the cyclicality of schooling: theory and evidence, Oxford Economic Papers, 55, 148-72.
Dickey, D.A. and Fuller, W.A. (1979) Distribution of the estimators for autoregressive time series with a unit root, Journal of the American Statistical Association, 74, 427-31.
Engle, R.F. and Granger, C.W.J. (1987) Cointegration and error correction: representation, estimation, and testing, Econometrica, 55, 251–76.
Johansen, S. (1988) Statistical analysis of cointegration vectors. Journal of economic dynamics and control, 12(2), 231-254.
Johansen, S., and Juselius, K. (1990) Maximum likelihood estimation and inference on cointegration—with applications to the demand for money. Oxford Bulletin of Economics and statistics, 52(2), 169-210.
Johnson, M.T. (2013) The impact of business cycle fluctuations on graduate school enrollment, Economics of Education Review, 34, 122-34.
Masih, A.M. and Masih, R. (1997) On the temporal causal relationship between energy consumption, real income, and prices: some new evidence from Asian-energy dependent NICs based on a multivariate cointegration/vector error-correction approach, Journal of Policy Modelling, 19, 417-40.
Narayan, P.K. and Smyth, R. (2005) Electricity consumption, employment and real income in Australia evidence from multivariate Granger causality tests. Energy Policy, 33(9), 1109-1116.
Narayan, P.K. and Smyth, R. (2006) Female labour force participation, fertility and infant mortality in Australia: some empirical evidence from Granger causality tests, Applied Economics, 38, 563-72.
NSCRC. (2013) Term Enrollment Estimates Spring 2013. National Student Clearinghouse Research Center. Available at http://research.studentclearinghouse.org (accessed 24 September 2013).
Perez-Pena, R., (2013). College enrollment falls as economy recovers. The New York Times, July 25, 2013, www.nytimes.com
Pesaran, M.H., Shin, Y. and Smith, R.J. (2001) Bounds testing approaches to the analysis of level relationships, Journal of Applied Econometrics, 16, 289–326.
Phillips, P.C.B. and Perron, P. (1988) Testing for a unit root in time series regression, Biometrika, 75, 335-46.
World Bank (2012) World Development Indicators. Available at http://data.worldbank.org (accessed 7 October 2013).
Downloads
Published
How to Cite
Issue
Section
License
The works published in this journal are subject to the following terms:
1. Oviedo University Press (the publisher) retains the property rights (copyright) of published works, and encourages and enables the reuse of the same under the license specified in paragraph 2.
© Ediuno. Ediciones de la Universidad de Oviedo / Oviedo University Press
2. The works are published in the online edition of the journal under a Creative Commons Attribution-Non Commercial-Non Derives 3.0 Spain (legal text). You can copy, use, distribute, transmit and publicly display, provided that: i) you cite the author and the original source of publication (journal, publisher and URL of the work), ii) they are not used for commercial purposes, iii) mentions the existence and specifications of this license.
3. Conditions of self-archiving. The author can archive the post-print version of the article (publisher’s version) on the author’s personal website and/or on the web of the institution where he belong, including a link to the page of the journal and putting the way of citation of the work. Economics and Business Letters and its URL https://reunido.uniovi.es/index.php/EBL/index are the only authorized source for correctly giving the reference of the publisher’s version in every mention of the article.
