Entry and Competition in the Market for Short-Cycle Programs
Short-cycle higher education programs form skilled human capital in two or three years and are eminently oriented to the labor market. While they could play a key role in the upskilling and reskilling of the workforce required for employment recove...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/969591624886015699/Entry-and-Competition-in-the-Market-for-Short-Cycle-Programs http://hdl.handle.net/10986/35887 |
| Summary: | Short-cycle higher education programs
form skilled human capital in two or three years and are
eminently oriented to the labor market. While they could
play a key role in the upskilling and reskilling of the
workforce required for employment recovery after the
COVID-19 pandemic, they will only do so if their supply
responds fast and nimbly to the skill needs to local labor
markets. This paper studies the entry, competition, and
turnover of short-cycle higher education programs (SCPs) in
Colombia. It documents a large expansion in the number of
programs over the past fifteen years and studies the
frequency of program entry and exit. It finds that the
market for SCPs is more dynamic than the market for
bachelor's programs, as it exhibits greater turnover or
“churn" of programs, with a significantly higher rate
of program entry and exit in a given year. Exploiting data
on local productivity and employment by field of study, the
paper finds that SCPs are more responsive than
bachelor's programs to changes in local labor demand.
Among SCP providers, private and non-university institutions
respond the most to the local economy. SCP entry is deterred
by the presence of competitors and responds to cost
considerations, particularly among private institutions. For
a given institution, exit and entry decisions are highly
correlated within a field of study. While enrollment is
sensitive to the number of competitors, institutions
differentiate their product by tuition, field, and
geographic coverage. Overall, the evidence suggests that
SCPs might indeed respond fast and nimbly to the local labor
market needs created by the pandemic. |
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