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Understand the IT Implications for the Enrollment Cliff

What is IT’s role in this top priority?

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  • Closures are becoming common due to increased competition, with more prestigious universities attracting students away from the less prestigious.
  • Governments are encouraging consolidation between institutions to save costs and support a changing demographic.
  • Institutional leadership may not be aware of the technology implications of their strategic initiatives to address the downturn in enrollment.

Our Advice

Critical Insight

The decline in enrollment threatens closure of the institution. IT must align itself with institutional efforts to increase a competitive advantage.

Impact and Result

  • Plan for cost reduction both internally through centralization efforts and externally through partnerships with other institutions.
  • Assess the external context of your institution; interview key stakeholders on their priorities; and determine how IT can support the competitive advantage of the institution.

Understand the IT Implications for the Enrollment Cliff Research & Tools

1. Understand the IT Implications for the Enrollment Cliff – A report to address declining enrollment in higher education.

This report gives an overview of how declining enrollment is affecting higher education and how IT professionals can support to the strategic direction of their institution.

2. PESTLE Analysis Template – Use this template to analyze the effect of external factors on IT.

Consider the following trends:

  • Political
  • Economic
  • Social
  • Technological
  • Legal
  • Environmental
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Understand the IT Implications for the Enrollment Cliff

Technology's role in the institution's survival.

Analyst Perspective

Support the competitive advantage of the institution.

The enrollment cliff refers to the projected significant decrease in enrollment in higher education institutions in the United States (US), particularly among traditional undergraduate students. The term "cliff" implies a sudden drop-off, which is expected to occur after 2025 or 2026.

This decline is due to several factors, including declining birth rates, increasing tuition costs, and a strong job market that may incentivize young people to enter the workforce instead of pursuing higher education.

The COVID-19 pandemic has also contributed to the enrollment cliff, as it has disrupted many traditional education models and raised concerns about the value of higher education. This decline in enrollment poses a significant financial challenge for colleges and universities that rely on tuition revenue. The risk of closure and consolidation is very real.

Photo of Mark Maby

Mark Maby
Research Director for Education, Industry Practice
Info-Tech Research Group

Executive Summary

Your Challenge

In the United States, enrollment is expected to decline due to a lower birth rate.

The pandemic has turned students away from higher education and the trend appears to be continuing.

Government funding for higher education has been largely flat for the last 20 years and it is dependent upon student numbers.

Higher education is entering a period of contraction following years of growth.

Common Obstacles

Closures are becoming common due to increased competition, with more prestigious universities attracting students away from the less prestigious.

Governments are encouraging consolidation between institutions to save costs and support a changing demographic.

Institutional leadership may not be aware of the technology implications of their strategic initiatives to address the downturn in enrollment.

Info-Tech’s Approach

The IT department needs to be proactive in its response to the enrollment cliff.

Plan for cost reduction both internally through centralization efforts and externally through partnerships with other institutions.

Assess the external context of your institution.

Interview key stakeholders on their priorities.

Determine how IT can support the competitive advantage of the institution.

Info-Tech Insight

The decline in enrollment threatens closure of the institution. IT must align itself with institutional efforts to increase a competitive advantage.

A diagram that shows the IT implications for the enrollment cliff, including social context, effects on higher education, response in higher education, and IT's response.

The enrollment cliff is fast approaching in the US

A diagram that shows enrollment cliff from 2012 to 2028, including 18-year-olds in the US, different ethnic groups, and different geographical areas.

Lower Birth Rate

The enrollment cliff is caused by a drop in the fertility rate, primarily in the US, which is expected to continue to decline by 1–2% per year after 2029 (Copley and Douthett, 2020).

The pivotal year will be 2025, when the number of high school graduates is expected to peak. Institutions will need to have strategies in place to support the demographic change.

The pipeline of 18-year-olds from high school is expected to remain stagnant and then decline in 2028.

Changing Ethnic Demographics

Soon, no single ethnic group will comprise a majority. While non-Hispanic Black and non-Hispanic white 18-year-olds are expected to decline, Asian and Hispanic students are expected to increase in numbers.

The geographic areas of Mountain and West-South-Central United States have the most resilient rates. Other areas are looking at a decline.

Sources: Grawe, “Demographics and the Demand for Higher Education.”; Boeckenstedt, 2022.

Enrollment trends are more resilient outside the US

In the United Kingdom, the number of 18-year-olds is expected to grow over the next decade. The number of applicants will hit one million by 2026. This will place demands on a robust admission system.
— UCAS Press Office, “UCAS End of Cycle 2021.”

Canada’s number of international students have rebounded from the pandemic. This is important because the number of domestic students entering higher education from high school is projected to be largely flat.
— “Canada: Enrollment in Public Elementary and Secondary Schools 2021.”; The PIE News, 2023

In Australia, the 17- to 19-year-old population is projected to increase from 943,513 in 2022 to 1,105,347 in 2032, with an annual growth of 30,000 each year in 2024 and 2025. This is important as international student numbers continue to recover.
— “Higher Education Facts and Figures 2022”; “International Student Arrivals Booming.”

A diagram that shows the relative importance of international students of United States, United Kingdom, Canada, and Australia.

Universities often look to international students to make up the shortfall in domestic enrolment.

The United States attracts the most international students. The US receives twice as many international students as the United Kingdom, Canada, or Australia. However, the number of students in these countries is proportionally larger due to their lower national populations.

Proportionally, the US underperforms. Relative to the US population, Australia’s international students account for 5x the number of international students in the US.

International students can go further in Australia or Canada than in the US to make up a shortfall in domestic enrolment.

The pandemic had enduring effects on enrollment

College attendance among undergraduates fell almost ten percent during the COVID-19 pandemic (Fischer, 2022).

The majority of students do not plan to return to higher education. Only 46% of students who left, or didn’t begin higher education, during the pandemic plan to return. This was found in a survey of 1,675 high school graduates ages 18–30 who had decided not to go to college or had dropped out of a two-year or four-year college program.

A diagram that shows who planned to return and their percentage.

Fewer high school students going to college is a worrying trend if subsequent years follow suit.

A recurring concern is that the largest demographic sees less value in obtaining a degree.

Only 46% of students have resumed their higher education plans after the pandemic.

Source: Burns et al., 2022.

Value is a clear issue in higher education

The perceived value of a degree is dropping.

The value of a degree is dropping against other development options.

“On the job training” seen as most valuable among high school graduates who stopped-out or didn’t begin college (survey on the value of education and training options; percentage choosing good to excellent).

A diagram that shows different development options.

— Sources: Burns et al., 2022; Zitner, 2023.

Americans do not see value in getting a degree.

56%: The majority of Americans do not believe it is worth it. Fifty-six percent believe that a four-year college degree is not worth the cost.

42%: Only 42% of Americans believe that a four-year college degree is worth the cost.

The cost-benefit proposition is continually questioned

Cost

46%: Half of Americans believe affordability is a top priority for public colleges and universities.

61%: Most believe that government should invest more in public colleges and universities.

82%: Student debt is widely seen as an overall problem.

78%: Three-quarters don’t believe financial aid adequately supports low-income students.

68%: Two-thirds support making community colleges free.

Benefit

86%: There’s a consensus that a college education benefits a career.

57%: About half of people believe community colleges are helpful and cost-effective.

28%: Only a quarter believe the public four-year university is helpful and cost-effective.

3/5: Most Americans believe colleges and students share the blame for time-to-degree problems.

74%: Three-quarters believe a college education is not necessary in today’s working world.

— Source: Jackson et al., 2022.

Some institutions are harder hit than others in the US

Hard hit institutions

Regional universities realized a 71% decline in enrollment from 2010 and 2021.
As higher education moves from enrollment growth to enrollment decline, regional universities are in a weaker position because their revenue is dependent on student numbers.

Small private colleges and historically Black universities are losing market to larger institutions.
These smaller colleges run on tuition dollars, making it more costly to provide quality higher education. Larger universities are competing on intimate college experience.

Community colleges struggled during the pandemic.
Students in a two-year program have less commitment than those in four-year programs.

Resilient institutions

Flagship universities realized a 79% increase in enrollment from 2010 and 2021.
State flagship universities are now expanding their enrollment strategy to poach the students that would have gone to regional universities in previous decades.

International students use international rankings to identify the schools they want to attend.
Ivy League schools and top R1 universities are able to attract international students because of their brand appeal.

Universities with largely online-only student enrollments saw increases during the pandemic.
Universities like Western Governors and Southern New Hampshire have over 100,000 students enrolled and employ an instruction model that reduces student–professor interaction.


— Sources: Brown, 2021; Copley and Douthett, 2020; Gardner, 2023; Gardner and June, 2022; June and O’Leary, 2022.

There is a growing trend of cuts and consolidation

Cuts increase risks to academic reputation

A decline in enrollment can impact academic quality if the reduction in revenue leads to cuts in programs, faculty, and student services.

This is seen at the University of Kansas which recently announced a plan to cut 42 programs (Moody, “University of Kansas Looks to Cut 42 Academic Programs.”).

State support per college student has declined from $7,518 in 2000 to $6,671 in 2021 when adjusted for inflation (National Science Foundation).

Mergers and closures are trending upwards

Since 2016, 88 institutions in the US have either closed or merged. While that rate slowed slightly during the pandemic, it has increase in 2023. This is likely due to the end of pandemic relief funding which supported struggling institutions.

Small private universities are more likely to close because they are unlikely to meet the merger needs of a university looking to expand.

Public colleges and universities are more likely to face mergers at the state level, such as in Connecticut, Maine, and New Hampshire.

A diagram that shows Institutional Consolidation Mergers & Closures Per Month

— Source: Higher Ed Dive Team, “How Many Colleges and Universities Have Closed since 2016?”

Higher education has a list of strategic responses

1. Increasing marketing and recruitment efforts

This can include targeted advertising campaigns, social media outreach, and offering more personalized interactions with prospective students.
Example IT Implications: A CRM to maximize recruitment efforts.

2. Expanding course offerings

To attract more non-traditional students, institutions need to develop flexible academic programs and offer new credentials, including micro-credentials and stackable credentials.
Example IT Implications: A flexible student information system to meet the changing needs.

3. Investing in student support services

Investing in student support services to help retain current students and attract new ones. This can include mental health services, academic advising, and career counseling.
Example IT Implications: A student success platform to support advising.

4. Offering more financial aid and scholarships

To make college more affordable will require not only fundraising but also ease of access to existing funds.
Example IT Implications: A student portal that integrates with the financial aid system.

5. Collaborating with other universities and community colleges

Joint degree programs and transfer agreements can help attract more students.
Example IT Implications: Strong data governance to support cooperation between institutions.

Determine IT’s response to the enrollment cliff

Cost Reduction

Internally
Reduce vendor spending through strategic vendor management.
Vendor Contract & Cost Optimization

Develop greater centralization through the reduction of duplication between central IT and distributed IT.

Externally
Create shared services between institutions.
Govern Shared Services

Leverage Info-Tech’s IT Cost Optimization Research Center

Manage your IT budgets and costs by leveraging our extensive portfolio of research-driven blueprints, templates, and tools.

Strategic Prioritization

PESTLE Analysis
Analyze the effect of external factors: political, economic, social, technological, legal, and environmental.

Stakeholder Interviews
Use the PESTLE outcomes to discover the primary objectives of your stakeholders with respect to IT priorities.

Porter’s Five Forces
Determine the competitive forces in higher education to prioritize strategic objectives.

Higher education PESTLE analysis

Know the factors and influencers at work in your industry’s value stream.

A PESTLE analysis is a useful tool for understanding the broader ecosystem within which higher education IT is operating to gauge external impacts and influencers on your institution.

Political: Examine political factors such as taxes, zoning restrictions, policy, and regulation.

Economic: Examine economic factors such as interest rates, inflation rate, exchange rates, financial and stock markets, and the job market.

Social: Examine social factors such as gender, race, age, income, disabilities, educational attainment, employment status, and religion.

Technological: Examine technological factors such as infrastructure, applications, enterprise architecture, availability of emerging tech, and technology end-of-life.

Legal: Examine legal factors such as trade laws, labor laws, environmental laws, and privacy laws.

Environmental: Examine environmental factors such as green initiatives, ethical issues, weather patterns, and pollution.

Higher education PESTLE template

Political

Will a change in government affect your funding model?

How do international relations affect your student pipeline?

How are government policies impacting your priorities?

Economic

Are there changes to financial aid structures?

Will demand for certain programs change in response to job potential in the wider economy?

What is the trend in your costs (salary requirements, requirements of digitally dependent generation, funding changes, etc.)?

Social

Students: Changing demographics? Attitude toward technology and social media? Requirements for access to information?

Faculty and administration: Attitude toward work and collaboration? Staffing availability? Demands for technology? Research priorities?

Technological

Is online learning affecting you, especially with the changes from COVID-19?

What is happening with your student records (security, storage, structure, etc.)?

What type of hardware upgrades and discontinuation are you expecting (removing student labs, upgrades to labs, etc.)?

Legal

Are there increased regulations with respect to data privacy and/or auditability?

Are there changes to specific education-related regulations (Higher Education Act, Pell Grant, etc.)?

Environmental

Are there paper records that must be transferred?

Are there sustainable campuses?

Is your institution going lean?

Sample higher education PESTLE analysis

Political

The state government has recently signed a contract with a list of preferred vendors. To take advantage of cost savings, we should consider switching from some of our current vendors.

Economic

There has been an increase in the number of private fund providers for our university, along with an increased demand for transparency. Our data gathering and analysis tools need to help us retain funds and attract more contributors.

A new manufacturing plant has opened in our city, and many students now need specialized training. We must provide them with the technology they need to learn these skills.

Social

There has been a recent surge in demand for computer programming courses, so we have to plan for the additional application maintenance required for the mandated software.

Students now expect to be connected everywhere while on campus. We have to increase the number of endpoints supported on our network across all buildings.

There has been an increase in the number of students taking online courses. We have to install and support collaboration applications, as well as online teaching tools.

Technological

Students are becoming less patient when dealing with technology solutions and will often try to solve issues by themselves. We have to update our help desk solutions to include do-it-yourself solutions to minimize interactions.

Recent improvements to the level of security of cloud providers has made it more appealing to host private data externally.

BYOD – students and teachers will continue connecting their devices, and we must support them.

Legal

There have been changes in security regulations for student data. Our procedures now have to include more stringent enforcement of cybersecurity.

There have been changes to the compliance requirements for Title IV institutions which are engaging with Online Program Management (OPM) companies.

Environmental

We have been trying to reduce our ecological footprint based on the mandate of the board of governors. We need to continue to look to externally hosted solutions to decrease the number of physical assets on campus.

1. Conduct a PESTLE analysis to identify macro trends

Input: IT and business stakeholder expertise
Output: Analysis of PESTLE factors impacting the IT organization
Materials: Whiteboard/flip charts, A computer
Participants: CIO, IT management team

  1. Review the information in this report in relation to your institutional context.
  2. In a group, identify relevant trends under categories of political, economic, social, technological, legal, and environmental. Relate each trend back to the institution by considering:
    1. How does this affect the institution?
    2. Why do we care?
  3. Review the output and list additional suggestions.

Download Info-Tech's PESTLE Analysis Template

Conduct interviews to get direct input from stakeholders

An interviewer should be open-minded, curious, and eager to learn and co-create with your stakeholders. Anyone can learn how to be an effective interviewer as long as they are willing to put themselves on the spot and be willing to fail.

The Do’s of Interviewing

Actively listen. Focus on the nuances and subtleties of the interviewee’s stories and feedback.

Ask for a walkthrough. Think chronologically about the interviewee’s experience. Ask “what next” often.

Ask for elaboration. Listen for times when the interviewee trails off or leaves something open-ended and dig deeper into these areas.

The Don’ts of Interviewing

Don’t sell your idea. People aren’t willing to open up if they think they are being sold something. They are more inclined to be polite and nod “yes” to get out of the situation you are putting them in. This is the single most common mistake new interviewers make.

Don’t talk too much. Spend 10% of your time talking and 90% of your time listening. You are there to learn from the interviewee, not the other way around.

Don’t go on tangents. Your time is limited. Unless you’re going somewhere productive, keep the interview to a scope.

2. Conduct interviews to discover the priorities of key stakeholders

Input: Analysis of PESTLE factors impacting the IT organization, Time from you and relevant stakeholders, List of key stakeholders who are responsible for the strategic direction of the institution
Output: Prioritized list of PPM decision-making support needs
Materials: Notebook or computer
Participants: Interviewer from IT, Relevant stakeholders

  1. Review the list of example interview questions on the next slide. Modify and expand those question to suit your institutional context as informed by the output from the PESTLE exercise.
  2. Identify the relevant stakeholders that you need to interview: President, Provost, Registrar, VP Finance, VP Enrollment, VP Student Affairs.
  3. Use the list of questions from step 1 and think of any other relevant questions.
  4. Book time with each stakeholder and then conduct the interview.
  5. Document key findings.
  6. Check that you have answered the questions from step 1.

Modify these example questions for stakeholder interviews

  1. Do you know the broad business goals of the institution? (e.g. expanding to new demographics, new programs, increased collaboration between departments)
  2. Who is your target market for enrollment? Do you understand their needs?
  3. Do you know the academic program portfolio of the institution? Do you know why it is constructed this way and if it is changing?
  4. What is your competitive advantage? Are you aware of what each part of the institution does to reinforce or protect the competitive advantage?
  5. Do you know what capabilities the institution is trying to enable to effectively compete?
  6. Are you aware of the strategies of each major function in the institution (e.g. Marketing, Sales)? What are the data and communication implications?
  7. Are you aware of the key projects that the institution is working on?
  8. Are you aware of the relationships between the projects, capabilities, and goals in the institution? (e.g. project X enables capability Y, which supports goal Z)
  9. Do you understand the policies you have and their implications on IT decision making?
  10. Can you list the decision-making bodies of the institution and the types of decisions they can make?
  11. Do you have business process documentation for key processes in the institution?
  12. Are you aware of what is happening in terms of mergers and acquisitions activity? Why are these activities occurring?

Porter’s Five Forces adapted to higher education

Use the Five Forces analysis to align IT initiatives with the competitive strategy of the institution.

1. Power of students: Strategic enrollment

What are the demographics of your students: domestic, international, ethnicity, age, population?

2. Power of suppliers: Faculty and facilities

What faculty does the institution want to attract and how do we support them?

What infrastructure is required to support the institution’s strategy?

3. Threat of new entrants

How are we competing with Big Tech offering work-to-train positions?

How are we competing with massive online universities like Western Governors?

4. Threat of substitution: Degree alternatives

How is the institution addressing alternatives to their certification?

  • Associates degree
  • Technical certification
  • Job market entrants

5. Competitive rivalry

There are too many institutions with declining enrollment.

Flagship schools are attracting the students.

How is the institution developing its brand to make it distinct from other institutions?


— Adapted from: “Porter’s Five Forces: Focus on Higher Education Marketing.”

3. Determine IT support of institutional competitiveness through a Five Forces analysis

Input: Insights from the stakeholder interviews
Output: Updated initiatives to IT’s strategy
Materials: Whiteboard/flip charts, Computer
Participants: CIO, IT leadership

  1. Use the output from stakeholder interviews to inform the discussion of Five Forces framework.
    • Power of students: Strategic enrollment
    • Power of suppliers: Faculty and facilities
    • Threat of new entrants
    • Threat of substitution: Degree alternatives
    • Competitive rivalry
  2. In a group, identify the initiatives that the institution is undertaking to address the first factor. Then discuss the implications for IT’s support.
  3. Continue with the subsequent factors.
  4. Update the IT strategy with the initiatives discussed in the activity. Reassess project priorities based on the input from the exercise.

Bibliography

Boeckenstedt, Jon. “Will Your College Survive the Demographic Cliff? National Trends Are Interesting--but Enrolling Students Is a Local Challenge.” The Chronicle of Higher Education, April 1, 2022. Gale Academic OneFile.

Brown, Sarah. “The Painful Conversation: A Small College Debates Its Future - and Struggles with the Fallout.” The Chronicle of Higher Education, vol. 67, no. 15, Apr. 2021, p. 20+. Gale Academic OneFile.

Burns, Adam, et al. “Exploring the Exodus from Higher Education.” Edge Research, May 2022, https://edgeresearch.com/wp-content/uploads/2022/09/HCM-EDGE-Research.pdf.

“Canada: Enrollment in Public Elementary and Secondary Schools 2021.” Statista, https://www.statista.com/statistics/449105/enrollment-in-public-elementary-and-secondary-schools-in-canada/. Accessed 21 Mar. 2023.

Copley, Paul, and Edward Douthett. “The Enrollment Cliff, Mega-Universities, COVID-19, and the Changing Landscape of U.S. Colleges.” The CPA Journal, October 5, 2020. https://www.cpajournal.com/2020/10/05/the-enrollment-cliff-mega-universities-covid-19-and-the-changing-landscape-of-u-s-colleges/.

Fischer, Karin. “The Shrinking of Higher Ed: In the Past, Colleges Grew Their Way out of Enrollment Crises. This Time Looks Different.” The Chronicle of Higher Education, vol. 69, no. 1, Sept. 2022, p. 14+. Gale Academic OneFile.

Gardner, Lee. “Flagships Prosper, While Regionals Suffer: Competition Is Getting Fierce, and the Gap Is Widening.” The Chronicle of Higher Education, vol. 69, no. 12, Feb. 2023, p. 32+. Gale Academic OneFile.

Gardner, Lee, and Audrey Williams June. “The Perilous Predicament of the Very Small College: Many Campuses with Fewer than 1,000 Students Survived the Pandemic on Fumes. What’s Next?” The Chronicle of Higher Education, vol. 69, no. 1, Sept. 2022, p. 32+. Gale Academic OneFile.

Grawe, Nathan D. “Demographics and the Demand for Higher Education.” https://ngrawe.sites.carleton.edu/demographics-and-the-demand-for-higher-education/2/. Accessed 9 Mar. 2023.

Higher Ed Dive Team. “How Many Colleges and Universities Have Closed since 2016?” Higher Ed Dive, https://www.highereddive.com/news/how-many-colleges-and-universities-have-closed-since-2016/539379/?referrer_site=www.educationdive.com. Accessed 28 Mar. 2023.

“Higher Education Facts and Figures 2022.” Universities Australia, May 2022, https://www.universitiesaustralia.edu.au/wp-content/uploads/2022/09/220207-HE-Facts-and-Figures-2022_2.0.pdf. Accessed 21 Mar. 2023.

“International Student Arrivals Booming.” Universities Australia, https://www.universitiesaustralia.edu.au/media-item/international-student-arrivals-booming/. Accessed 21 Mar. 2023.

Jackson, Chris, et al. “Vast Majority of Americans Believe Students Deserve an Equal Opportunity to Pursue Higher Education.” Ipsos, 11 July 2022, https://www.ipsos.com/en-us/news-polls/higher-education-july-2022. Accessed 23 Mar. 2023.

June, Audrey Williams, and Brian O’Leary. “Enrollment Competition: The State With Too Many Colleges.” The Chronicle of Higher Education, vol. 69, no. 7, Chronicle of Higher Education, Inc., Nov. 2022, pp. 11–12.

Moody, Josh. “University of Kansas Looks to Cut 42 Academic Programs.” Inside Higher Ed, February 18, 2022. https://www.insidehighered.com/news/2022/02/18/university-kansas-plans-cut-42-academic-programs.

National Science Foundation. “State Support for Higher Education per Full-Time Equivalent Student.” https://ncses.nsf.gov/indicators/states/indicator/state-support-for-higher-education-per-fte-student. Accessed 30 Mar. 2023.

“Porter’s Five Forces: Focus on Higher Education Marketing”. Tempo, 2 Aug. 2016, https://tempostrategic.com/porters-five-forces-impact-higher-education-marketing/. Accessed 10 Mar. 2023.

The PIE News. “Over 800,000 International Students in Canada in 2022.” 16 Feb. 2023, https://thepienews.com/news/international-students-canada-2022/. Accessed 21 Mar. 2023.

UCAS Press Office. “Top Destination of International Students Worldwide.” Jan. 2022, https://www.statista.com/statistics/297132/top-host-destination-of-international-students-worldwide/?locale=en. Accessed 21 Mar. 2023.

“UCAS End of Cycle 2021: Strong Demand for UK HE amidst a Global Pandemic.” UCAS, 27 Jan. 2022, https://www.ucas.com/corporate/news-and-key-documents/news/ucas-end-cycle-2021-strong-demand-uk-he-amidst-global-pandemic. Accessed 21 Mar. 2023.

Zitner, Aaron. “WSJ News Exclusive | America Pulls Back From Values That Once Defined It, WSJ-NORC Poll Finds.” Wall Street Journal, March 27, 2023, sec. US. https://www.wsj.com/articles/americans-pull-back-from-values-that-once-defined-u-s-wsj-norc-poll-finds-df8534cd.

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