Association for Public Policy Analysis & Management

This paper examines whether, and to what extent, demand for educational programs aligns with labor demand for related occupations. By matching mass layoff data to industries and calculating the distribution of occupations across industries, I create novel measures of occupational layoffs that that are closely tied to vocational programs and courses at community colleges in the state of Michigan. I find that students are sensitive to occupational layoffs and that enrollment in a community college program decreases by by 1-1.5% for every additional layoff in a related occupation per 10,000 county residents during a cohort's senior year of high school. However, layoffs do not deter students from entering vocational programs at community colleges overall and instead students substitute into other vocational programs. The precise program-to-program substitution effects vary depending on which occupations are affected by layoffs, but in general, students shift enrollment into programs that require similar skills and knowledge. This finding suggests that students are unlikely to be made worse-off by switching into fields for which their abilities are a poor match, and also indicates that students' preferences for programs may be driven by skill and knowledge content.