Impacts of COVID on University’s Finances

Abstract

Did universities benefit from the pandemic? Some did receive more funding than usual. We use vector autoregressive models to forecast both enrollment and public subsidies in a jurisdiction where public funding depends mostly on enrollment. Using unemployment as an established proxy for the impact of recessions on enrollment, we show that the recent COVID pandemic increases pressure on public subsidies. Further, we use our forecasts to decompose the current subsidies between long-term subsidies, recession induced subsidies, and additional funding. We find that the subsidies given during the pandemic were higher than what a typical recession would command for 8 universities out of 18.