Association for Public Policy Analysis & Management

Community colleges have increasingly become a stepping stone to bachelor’s degree attainment. Yet, policy makers and researchers have been concerned about the viability of the community college transfer function. On one hand, the “democratization” view suggests that community colleges have increased overall access to postsecondary education by making higher education possible for many students through open admissions and low costs.  On the other hand, some posit that community colleges serve as a “diversion” by channeling students into vocational courses and weakening their educational progress through increased flexibility and nontraditional patterns of attendance (e.g., delayed entry, part-time enrollment, combining employment with schooling). As calls to improve higher education efficiency continue to grow, understanding the impact of initiating in community colleges for Bachelor-aspiring students is an important and timely question.

While a large body of research has explored the transfer function of community colleges, the majority of the existing studies focus on the educational outcomes of community college students, particularly four-year degree completion. In contrast, there is little evidence on its impacts on student labor market outcomes. Yet, even for those who could enroll in a four-year college immediately following high school, students are increasingly looking to community colleges as a monetarily efficient first step towards eventual BA attainment.  Therefore, understanding the impacts and the cost-effectiveness of initiating in two-year colleges is critical for various stakeholders. 

Using a large administrative data matched with the National Student Clearinghouse (NSC), and Unemployment Insurance (UI) records, this paper intends to provide a better understanding of the transfer function of community colleges by examining not just students’ academic outcomes but also their labor market outcomes, comparing outcomes between Bachelor-aspiring students who initiated in a community college versus similar students who started in a four-year college. We focused on 55,728 Bachelor-aspiring students who initially enrolled in one of the two-year or four-year public or private institution in the fall of 2004 and tracked these students for eight years. We used multiple strategies including a traditional Mincerian model, and propensity score matching to control for baseline differences between students. We used multiple strategies including a traditional Mincerian model, and propensity score matching to control for baseline differences between students.

Results indicate that starting in a community college over a four-year university decreases the probability of completing a bachelor’s degree by 35%. This number is reduced to 15% when restricting to non-selective four-year institutions, though the coefficient is still significant. Such negative impact is largely driven by the low transfer rate, where only 23% of community college students with the demonstrated intention to get 4-year degrees transferred within 8 year since initial enrollment. In terms of labor market outcomes, students who started in two-year colleges had lower average quarterly earnings in 2012 by $1,557 compared to those who initiated at a four-year college. However, this difference is sharply reduced and no longer significant when compared to students who started in non-selective four-year institutions only.