What college enrollment trends say about changing US economy

We know the Covid-19 pandemic has changed the US workforce forever. What we don't know for sure is how the changes will play out. Some are accelerations of trends that began around the time of the financial crisis in 2008 or earlier, while others were directly inspired by the pandemic. Still others were temporary dislocations that will revert. But it's anyone's guess which changes are which.

Rather than focusing on current numbers that are confusing, we may get a clearer picture by looking at trends in college enrollment. These represent decisions made by individuals today considering their own long-term futures.

College admissions have been falling since 2010, and really dived during the pandemic. This was blamed mostly on the lockdown, and many commentators expected enrollment to not only rebound as the pandemic eased, but to exceed 2019 levels as students returned after postponing their studies. Instead, numbers have continued to fall. Enrollment dropped at a rate of 0.8% per year in the 10 years prior to the pandemic, then 2.5% in 2020 and 2.7% in 2021. An even larger decline is expected for 2022 when the numbers are counted in the Fall. These declines happened even though the US population climbed by 7% and increasing numbers of foreign students were included in the enrollment numbers.

There is one post-secondary educational sector with gangbuster growth. Enrollment in two-year agricultural sciences degrees rose 41% in 2021. Other hot two-year degrees include construction management - up 18% - while blue-collar technical fields are up an average of 7%.

It's important to understand these are not "vocational" or "trade school" programs to give unskilled individuals basic job skills. The students in these programs are usually working in their fields of study and looking for advanced instruction in theory and broader business skills so they can move up to management jobs or start their own businesses, taking positions that in the past would likely have been held by four-year college graduates without specific training. While writing this column I had my semi-annual HVAC inspection and both technicians were enrolled in two-year precision manufacturing programs, one to qualify for a management position and the other with the ambition of starting his own company.

These numbers are significant, with students in two-year programs making up about a third of all post-secondary students. Although two-year programs were hit harder by the pandemic than those taking four-years, with enrollment down 15% since 2019, what you might call "science of blue-collar occupation" degrees are running counter to the negative trend. This might be a temporary blip brought on by exceptionally strong demand for experienced professionals in these fields with up-to-date technical skills and broad business management training. But I wonder if it might represent the end of traditional blue collar/white collar/professional distinctions.

Traditional thinking was that blue-collar workers learned rote skills and had to be protected from innovation. White-collar workers were supposed to have general skills that could adapt to change, and professionals were the ones who could cause change and exploit its opportunities. But the experience of the last few decades seems to indicate that it was white-collar workers — mainly with college degrees in non-job-specific fields — who lost out to innovation, while blue-collar experience was more readily transported to fast-changing fields. In many cases it was former blue-collar workers and college dropouts driving change, not elite professionals with graduate degrees.

Many people view a traditional four-year liberal arts degree — without a focus on job training — as a cornerstone of an educated citizenry. As college costs soar and the demand for these graduates languishes, it's not surprising that their numbers are dwindling. Prior to the pandemic, increases in Hispanic, Asian and mixed-race students offset much of the decline among White, Black and Native Americans. But in 2020 and 2021, it was the Hispanic and Asian students whose numbers declined the fastest.

Some people will demand political fixes to increase four-year liberal arts enrollments, particularly among non-Whites. But perhaps a more egalitarian and progressive stance is to instead to encourage two-year technical degrees that lead to more small business formation, more company promotions from within and a more diverse upper-middle class. Running a business or managing a team of people engaged in technical work may represent a form of education as valuable to society as a four-year degree in literature or sociology. Of course, society needs both, but maybe we overinvested in the latter and underinvested in the former.

Disclaimer: This article first appeared on Bloomberg, and is published by special syndication arrangement