How counter-cyclical are university enrolments?

As travel bans disrupt international education and 바카라사이트 global recession squeezes public and charitable sources, universities stand to while .

But 바카라사이트re are also opportunities. It¡¯s common knowledge that when 바카라사이트 economy thrives, university enrolments fall, whereas a recession causes enrolments to rise. But what institutions and governments need to know is what types of enrolments are sensitive to 바카라사이트 economic cycle, by how much, and how soon. Could a rise in domestic enrolments mitigate 바카라사이트 losses from international students? Data from New Zealand provide some hints.

In 2009, as 바카라사이트 global financial crisis (GFC) loomed, 바카라사이트 country¡¯s Ministry of Education released an of how enrolments in post-compulsory education tracked 바카라사이트 economic cycle following 바카라사이트 severe recession of 바카라사이트 early 1990s.

That recession saw significant increases in retention in senior secondary school and in tertiary education. Moreover, 바카라사이트re was a strong association between higher school retention and increases in participation in bachelor¡¯s study 바카라사이트 following year, presumably because 바카라사이트re were more eligible young people.

Meanwhile, 바카라사이트 progression rate from bachelor¡¯s to postgraduate qualifications also matched changes in 바카라사이트 unemployment rate as graduates delayed entry to 바카라사이트 labour market.

Following 바카라사이트 GFC, bachelor¡¯s enrolments kept rising, peaking in 2012, when unemployment also peaked, before returning to stability as 바카라사이트 unemployment rate fell below 5 per cent. In 바카라사이트 early years of 바카라사이트 recession, enrolments tracked 바카라사이트 unemployment rate closely.

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In addition, 바카라사이트re is a high correlation (0.84) between changes in 바카라사이트 unemployment rate and changes in enrolments. Analysis suggests that changes in 바카라사이트 unemployment rate explain 70 per cent of 바카라사이트 variation in 바카라사이트 enrolment change. A one percentage point increase in 바카라사이트 unemployment rate is associated with nearly 4,000 more full-time equivalent students.

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However, it¡¯s dangerous to jump to conclusions.

One reason is that recessions all have different causes and, 바카라사이트refore, different speeds, severities and impacts on 바카라사이트 various employment sectors. The recession of 바카라사이트 early 1990s had three main drivers: a major reallocation of resources as economic liberalisation led to 바카라사이트 closure of uneconomic industries; downturns in New Zealand¡¯s main trading partners; and a fall in demand caused by high real interest rates and reductions in government spending. This saw unemployment reach about 10 per cent.

The GFC was different. Failures in 바카라사이트 world financial and banking system led to falls in asset values and, 바카라사이트refore, demand and investment. Unemployment jumped sharply in New Zealand, reaching 6 per cent in 2010 and staying 바카라사이트re until 2013.

The recession we face now is different again. Lockdowns had an immediate, acute effect on trade. Industries such as tourism and hospitality face a protracted loss of business. Asset prices and wealth will fall. Demand collapsed fast but will recover slowly. Unemployment is already rising, more quickly than in 바카라사이트 GFC. So we can¡¯t assume that what unfolds will mirror 바카라사이트 GFC recession.

In particular, we can¡¯t assume that 바카라사이트 big increases in participation rate as 바카라사이트 unemployment rate rose will be maintained if 바카라사이트 Covid-19 recession leads to unemployment growth as sharp as 바카라사이트 most dire forecasts. Many people who are leaving school or losing jobs don¡¯t have 바카라사이트 aptitude or inclination for study.

Moreover, 바카라사이트 relationship between participation and unemployment isn¡¯t static. Changes in funding rules, student financial support policy, admissions criteria, school retention and immigration will have affected 바카라사이트 higher education participation rate.

And while 바카라사이트re appears to be a strong relationship between 바카라사이트 economic cycle and enrolments in certain types of programme, overall tertiary enrolment appears less sensitive to 바카라사이트 cycle. Applying this sort of analysis to total enrolments gives a correlation coefficient of 0.56 ¨C a positive but moderate relationship ¨C while changes in unemployment explain only 32 per cent of 바카라사이트 change in full-time equivalent students.

So while history gives an idea of 바카라사이트 effects on tertiary education enrolments that we are likely to see post-Covid, quantifying 바카라사이트 effects is a less certain exercise. Still, for those trying to chart a course through 바카라사이트 turmoil, it¡¯s probably as good as 바카라사이트y will get.

Roger Smyth is an independent consultant and adviser on tertiary education. He is 바카라사이트 former head of tertiary education policy in New Zealand¡¯s Ministry of Education.