Short-cycle higher education programs (SCPs) form skilled human capital in two or three years and could be key to upskilling and reskilling the workforce, provided their supply responds fast and nimbly to local labor market needs. We study determinants of SCP entry and exit in Colombia for markets defined by geographic location and field of study. We show greater dynamism in the market for SCPs than bachelor’s program, with greater turnover or “churn” of programs. Exploiting data on local economic activity and employment by field of study, we find that higher education institutions open new SCPs in response to local labor market demand as well as competition and costs. SCPs are more responsive to local labor market demand than bachelor’s programs; among SCP providers, private and non-university institutions are the most responsive. While private SCP entry is deterred by the presence of competitors and responds to cost considerations, these responses are weaker among public SCPs. Further, institutions often open and close programs simultaneously within a field, perhaps reflecting capacity constraints. These findings have implications for the regulation and funding of SCP providers.
short-cycle programs, higher education supply, entry, exit, competition
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