Research Brief

The coronavirus (COVID-19) pandemic has impacted the world in ways that few could have imagined. The outbreak of COVID-19 was sudden and unexpected, and the subsequent shutdown of business and institutional activity created uncertainty across a wide spectrum of economic and social activities. The uncertainty that currently exists hinges on several important questions: 

When will the pandemic end and will there be a resurgence of COVID-19 in the fall?

This is not a question we are able to answer, but it is one that is driving leaders in higher education to strategically plan for multiple scenarios. These scenarios include a wide range of potential outcomes that must be considered – both optimistic and pessimistic. Examples of the planning efforts can be seen in new institutional policies that now guide workplace behavior, appropriate personal protective equipment, and other strategies like work-from-home and staggered and flexible schedules. The uncertainty around when the pandemic will end means KCTCS must be flexible and ready to pivot in response to the new reality that now exists. We currently do not know if we will see a resurgence of COVID-19 in the fall and winter cold seasons. According to the Center for Disease Control and Prevention (CDC), a second COVID-19 outbreak is possible in the coming flu season, which would only compound and elongate the problem. The uncertainty that exists is driving leadership to consider all possible outcomes and solutions. 

Will students return to pre-outbreak activity levels?

States have started to ease restrictions on social distancing and are now waiting to see if COVID-19 cases increase as a result. Many governors are feeling pressure from their constituents to return to normal business activity due to the impact on jobs and the economy. Whether students will return to normal activity even after restrictions have been fully lifted remains to be seen. Much depends on the ability of institutions to provide a safe environment to resume traditional, in-person instruction. However, perhaps just

as important is the ability of institutions to instill confidence in students (current and prospective) and parents that campus communities are safe and that contingency plans are in place in the event of a resurgence or second wave of the virus.

How will job markets change in response to COVID-19 and the subsequent shutdown?

A key question underlying the current COVID-19 pandemic is whether industries will use the shutdown as an opportunity to reallocate labor into new or emerging areas and significantly reduce labor in areas with declining need. According to the University of Chicago’s Becker Freidman Institute, 42%, or 11.6 million jobs, of all jobs lost due to the COVID-19 outbreak, are likely to be permanently lost. The jobs with the highest risk of being permanently lost are those in industries where the shutdown led to companies closing their doors for good. For example, many restaurants and bars that relied on in-person business have permanently closed. Additionally, automation of industrial processes has been in progress for many years, but it is likely that the COVID-19 outbreak has accelerated that process by encouraging companies to look for alternatives to human employees. Evidence supporting this trend can be seen in the value of stocks for companies that specialize in automation. Since March, U.S. automation giant Rockwell Automation Inc. has seen its stock price increase nearly 90%, suggesting many investors are betting on an increase in automation. 

Research Goals:

Given these questions, this report aimed to accomplish two goals:

1. Evaluate how KCTCS Enrollment been impacted by COVID-19
2. Explore how job markets and occupations have been impacted by COVID-19 

This section describes recent trends in KCTCS enrollment. Figure 1 shows fall enrollment numbers in May. These numbers are used to monitor fall enrollment after the end of the prior academic year and are based on the KCTCS Weekly Enrollment Report. Figure 1 shows two important facts. First, it is normal for enrollment to regularly increase as the weeks progress toward the start of the fall semester and more students enroll in classes. Second, Fall 2020 enrollment is substantially lower than the enrollment from last fall. Figure 2 highlights the gap between Fall 2019 and Fall 2020 enrollment. As of May 8, 2020, Fall 2020 enrollment was down about 6,700 students, but by the last week in May the gap decreased to less than 6,400 students. The decreasing of this gap is interesting as it coincides with recent reductions in the number of social distancing restrictions throughout the state. For example, restrictions on manufacturing, construction, and other industries were reduced in May. Additionally, houses of worship and social gatherings of less than 10 people were authorized to begin on May 25th. The easing of restrictions on businesses and public gatherings may be contributing to the decreasing enrollment gap by easing health concerns for the general public. In June, the Kentucky government listed several additional lifts on restrictions, including fitness centers, in home childcare, and youth sports. A key question is whether KCTCS will continue to see a decrease in the gap between 2019 and 2020 as more restrictions are lifted. 

Figure 1: Fall 2019 and Fall 2020 Enrollment Trajectories

Figure 2: Gap Between Fall 2019 and Fall 2020 Enrollment Trajectories

Previous research produced by ORPA suggested the association between the economy and enrollment is countercyclical. When the economy is not performing well, KCTCS should expect to have higher enrollments. Figure 3 shows the relationship between unemployment and enrollment across time. Each point in the scatterplot represents an academic year. Figure 3 shows a strong linear relationship between unemployment and enrollment. As the unemployment rate increases by 1%, expected enrollment increases by 8,699 students. The R2 value for this relationship is 0.69, which means 69% of the variation in enrollment can be explained by unemployment. This level of explanation by a single variable suggests a very strong relationship between the economy and KCTCS enrollment. The key question is whether the results of the previous ORPA study apply post-pandemic. In part, the answer is yes. Enrollments at KCTCS are still sensitive to both state and national economic performance, and displaced and unemployed workers will likely continue to look to KCTCS for help to develop new skills that are more marketable post-pandemic. What is less clear is whether the impact of the economy on KCTCS enrollment will be the same given reasonable fears on the part of students about the dangers associated with public gatherings, including participation in normal campus activities.

Figure 3: Association between KCTCS Enrollment and Unemployment

It is possible that many students may not feel comfortable taking in-person courses. Social distancing guidelines have now been hard-wired into our subconscious and it may take some time for students to feel that they can safely come to campus to take courses. Another possibility is that many students may not feel comfortable taking courses exclusively online. As a result, KCTCS may see many students choose to take a gap year. As was shown previously, Fall 2020 enrollment for KCTCS is about 6,300 students less than this same time in the previous year. However, we have also observed a decrease in the gap between Fall 2019 and Fall 2020 enrollment as the state has relaxed restrictions. If easing restrictions puts minds at rest, KCTCS should expect increased enrollment as the economy recovers. However, this may not happen immediately given uncertainty about a possible resurgence of COVID-19 during the fall and winter.

The impact of the COVID-19 pandemic has been widespread and significant. From January 2019 through February 2020, the unemployment rate in the United Sates was steady at approximately 3.5%. The full-scale shutdown of American businesses and institutions began to be fully captured by economic data in April, when the national unemployment rate hit 14.7%. This increase in unemployment was the largest spike in recent U.S. history, surpassing the unemployment rate of all prior recessions. Map 1 shows that the distribution of the economic impact on Kentucky has not been evenly distributed across counties. Counties with darker shading have experienced greater change in unemployment between April 2019 and April 2020. An interesting pattern to highlight are the clusters of counties with high and low change in central (high) and far western (low) areas of the state.

As shown in Table 1, the impact of the pandemic has not been equal across industry sectors. The industry hit hardest by the COVID-19 induced shutdown has been leisure and hospitality. From May 2019 to May 2020, the unemployment rate in this industry increased from 5.0% to 35.9%. Restrictions on travel, cancelling of sporting events, concerts, and professional conferences has led many in the leisure and hospitality industry to layoff thousands of employees. Other industries experiencing significant increases in unemployment include construction (+12.7%), manufacturing (+11.6%), and wholesale and retail trade (+15.1%).

Map 1: Change in Kentucky Unemployment April 2019 to April 2020

Source: Bureau of Labor Statistics 

Note: May 2020 Local Area Unemployment Statistics were not available at the time of this report