Author: Andrew Berger-Gross
North Carolina’s growing economy is making it easier for jobseekers to find employment in our state. This article describes how our red-hot labor market has bolstered the outcomes of some of our state’s workforce programs and affected enrollment trends in our state’s public universities and community colleges.
Earlier this year, we published the 2017 edition of the Common Follow-Up System Evaluation Report – a biannual summary of how our state’s publicly-funded re-employment, job training, and education programs are performing. This report allows you to track how many individuals have completed these programs, whether these workers go on to obtain employment in North Carolina, and how much they earn in wages. To a large extent, these outcomes reflect conditions in our state’s economy and the opportunities available to workers in the labor market after they complete these programs.
North Carolina’s labor market has tightened substantially following the Great Recession as our economy has expanded and employers have ramped up hiring. We estimate that there were only 2.5 jobseekers per job opening in our state in 2017, compared to 10.3 in 2009. Jobseekers tend to land jobs faster when the labor market is tight, since they are contending against relatively fewer other applicants for a given position.
The relationship between a tight labor market and workers’ employment prospects is evident in several of the programs covered by our recent report. Here we highlight two particular workforce programs to illustrate this relationship:
The Wagner-Peyser program, which is administered by our state’s Division of Workforce Solutions (DWS), provides workforce services to a broad cross-section of jobseekers, including unemployment insurance (UI) claimants. Workers exiting the Wagner-Peyser program experienced improved outcomes during the period covered by the report (2011 through 2015), with each successive cohort seeing higher rates of employment as the labor market tightened.
Meanwhile, workers exiting the Workforce Investment Act-Youth program – a smaller program designed to serve low-income youth, also administered by DWS – saw even more rapid gains with each successive cohort during this period. Young workers are disproportionately impacted by changing employer needs during the ups-and-downs of the labor market, experiencing steep employment losses during recessions, but benefiting from rapid employment gains when the economy is strong.
A tightening labor market can also affect individuals’ decisions about whether to enroll in higher education. Economists have long observed that college enrollment declines as expanding employment opportunities draw students away from school and into the labor force, but more recent research found that this effect has been primarily concentrated among community colleges rather than universities.
Indeed, our recent report shows that the total number of students in the North Carolina Community College System’s (NCCCS) Career and Technical Education (CTE) degree programs declined in each of the five years examined as the labor market tightened. Meanwhile, the number of students enrolled in the University of North Carolina (UNC) system’s Bachelor’s Degree programs did not decline, but instead increased slightly.
In conclusion: when assessing the performance of our state’s workforce and education programs, it is important to understand the broader economic context. A tightening labor market creates the conditions for improved employment outcomes, and may also impact individuals’ likelihood of enrolling in higher education (particularly community college). This article provides only a high-level overview of these effects; some workforce and education programs yield better outcomes than others, and certain populations are more affected by the ups-and-downs of the labor market than others. But in general, following trends in our state’s economy can help us interpret the workforce and education trends summarized in our recent report.
In addition, understanding the relationship between the economy and our education and workforce programs can help us anticipate the consequences of the next recession—which many economists expect to occur by 2020—and to prepare accordingly. If previous history is any guide, we should expect to see declining employment rates and increased enrollment in higher education (especially at community colleges) when economic growth slows and job opportunities dry up.
General disclaimers:
Data sources cited in this article are derived from surveys and administrative records and are subject to sampling error and non-sampling error. Any mistakes in data management, analysis, or presentation are the author’s.
1NCCCS’s CTE degree programs offer three types of credentials, depending on the specific area: certificates, diplomas, and Associate degrees. In the 2017 Common Follow-Up System Evaluation Report, enrollees in these three types of degree programs are reported separately. It is possible for a student to initially enroll in one degree program (e.g., Associate) and go on to complete their studies and receive a credential at a different level (e.g., a certificate). In the graph below, the gray dotted line represents students in all NCCCS CTE programs, not just Associate degree programs.