2012 Reports

Measuring Efficiency in the Community College Sector

Belfield, Clive

Community colleges are increasingly being pressed to demonstrate efficiency and improve productivity even as these concepts are not clearly defined and require a significant set of assumptions to determine. This paper sets out a preferred economic definition of efficiency: fiscal and social cost per degree. It then assesses the validity of using IPEDS data to calculate efficiency for the community college system. Using IPEDS, I estimate the fiscal cost per associate degree at $52,900 for comprehensive community colleges and $42,740 for vocational colleges (in 2008 dollars); the social costs per degree are $71,610 and $56,930, respectively. The community college sector has become more efficient over time: fiscal and social costs per degree are lower in real terms in 2008 than they were in 1987. However, two issues are important to the validity of IPEDS: the ability to adjust for differences in student ability and the way that transfer patterns are incorporated. This paper addresses both of them.