Estimating the returns to community college schooling for displaced workers

Abstract

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The labor market returns to a for-profit college education

“…These estimates are slightly higher than other estimates of forprofit returns (Turner, 2012), but fall below estimates of the returns to public community colleges (Jacobson et al, 2005;Jepsen et al, in press) and traditional four-year colleges (Oreopolous & Petronijevic, 2013) found in the literature. They also fall below the returns needed to offset the private and social costs of for-profit associate's degree attendance (Cellini, 2012), suggesting that for-profits may not be worthwhile for the average student.…”

“…two-year college attendance (2% per year), 27 and lower than the returns to a year of public community college attendance reported by Jacobson et al (2005) (9-13% per year). Our estimates remain even slightly below the 5-8% range found for public community college students in cross-sectional studies in the 1980s and 1990s as reported by Kane and Rouse (1999).…”

“…Jacobson et al (2005) and Jepsen et al (in press) use an individual-or person-specific fixed effects approach comparing the wages of students before and after they attend a public community college, thereby controlling for time-invariant individual characteristics that may bias cross-sectional estimates. Among displaced workers in Washington State, Jacobson et al (2005) find returns of 9% per year of education for men and 13% for women, with much higher returns to quantitative and technically oriented vocational coursework than less-quantitative coursework in the humanities, social sciences, and basic skills. Among all community college students in Kentucky, Jepsen et al (in press) find higher returns -56% for an associate's degree for women and 24% for men completing degrees.…”

Estimating the effect of a retraining program on the re-employment rate of displaced workers

“…• First, intensive (re)training programs designed for laid-off workers have positive effects not only their subsequent wages (see, for instance, Jacobson et al, 2005, andStenberg andWesterlund, 2008), but also on their employment rates, and especially on their employment rate in regular jobs (with long-term labour contracts); • Second, these programs, like some other active labour market programs (see, for instance, Lechner, 2004, Jespersen et al, 2008, and Fitzenberger et al, 2009 other examples), have medium-and long-run effects on the employment rate of trainees.…”

“…Then, applying ordinary least squares to nonexperimental data, she concludes that, "even if some training programs can be shown to provide positive job changes that eventually result in higher job satisfaction or greater income for displaced workers, they may still turn out not to be socially beneficial." In a more recent paper, Jacobson et al (2005) have evaluated the effects of community college schooling offered to laid-off workers in the Washington State. This program includes a broad variety of courses, ranging from "basic skills" and vocational training to academic courses in math and science.…”