On the relationship between business cycle and college enrollment in the U.S.: a time series approach

We examine causality between business cycle and college enrollment in the United States using a macro-level data from 1970 to 2011. Autoregressive distributed lag (ARDL) bounds test and Johansen test for cointegration resulted in existence of a stable long-run cointegrating relationship among unemployment rate, per capita GDP, and college enrollment. We find unemployment rate to Granger cause college enrollment in both the short and the long run while GDP per capita to Granger cause college enrollment in the long run. These findings provide evidence for significant causal relationship between college enrollments and economic fluctuations.