Duane E. Leigh

Labor Market Returns to Community Colleges: Evidence for Returning Adults

Kane and Rouse (1993) furnish evidence that enrollment in a two-year-or four-year-college program increases earnings by 5 to 8 percent per year of college credits, whether or not a degree is earned. This evidence has provided the intellectual basis for policy recommendations to increase access by adult workers to long-term education and training programs, such as those supplied by community colleges. Yet to be answered, however, is the question whether these favorable return estimates hold for experienced adult workers who return to school. For both A.A. and nondegree community college programs, our results indicate returns that are positive and of essentially the same size for returning adults as they are for continuing high school graduates. Among males in nondegree programs, in fact, returning adults enjoy an incremental earnings effect of 8 to 10 percent above that received by continuing students.

Wage Determination in the Union and Nonunion Sectors: A Sample Selectivity Approach

This paper re-examines the question, recently raised in this journal by Bloch and Kuskin, of whether wages are determined differently in the union and nonunion sectors. Whereas Bloch and Kuskin employed ordinary least squares to estimate separate wage equations for the two sectors, this study uses a methodology proposed by Heckman and by Lee to correct for the possibility that wage differences may determine the union status of workers as well as vice versa. The authors find that union status is strongly related to the predicted union-nonunion wage differential, but their evidence nevertheless reinforces Bloch and Kuskins empirical finding that the union earnings function is less sensitive than the nonunion earnings function to changes in nearly every observable attribute of workers, such as education and experience. The authors also conclude that previous studies using separately estimated union and nonunion wage equations may have understated the success of unions in raising the relative wages of their members.

The Endogeneity of Union Status: An Empirical Test

An unsettled issue in the literature relating to the relative wage effect of unions is the appropriate treatment of union status in a wage determination model. In the context of a three-equation model determining union membership and union- and nonunion-sector wage rates, this paper presents an instrumental variables (IV) procedure for estimating the parameters of the wage equations and a test of the exogeneity of union status using the Hausman specification test. An advantage of our IV procedure in comparison to the widely used inverse Mills ratio procedure is that our procedure is a distribution-free estimator, whereas the inverse Mills ratio estimator hinges in the assumption that the error term of the choice equation is normally distributed. Using data for a sample of middle-aged white workers, we estimate the parameters of the union and nonunion wage equations with both procedures. On the key question of the endogeneity of union status, the Hausman test decisively rejects the null hypothesis of exogeneity. The inverse Mills ratio procedure, in contrast, provides coefficient estimates on the selectivity terms that fail to indicate evidence of sample selectivity in either sector.

Do the Returns to Community Colleges Differ between Academic and Vocational Programs

This paper provides new evidence about the payoffs to community colleges’ terminal training programs as distinct from their traditional transfer function. Using NLSY data, we offer three main findings. First, four-year college graduates who started at a community college are not at a substantial earnings disadvantage relative to those who started at a four-year college. Second, community college students in terminal training programs enjoy a positive payoff comparable to that received by four-year college starters who do not graduate. Finally, we find evidence of positive self-selection for community college students who choose the terminal training track.

Community college enrollment, college major, and the gender wage gap

The literature on the narrowing of the gender wage gap during the 1980s considers, among other factors, the closing of the male-female differential in post-secondary education. This paper looks specifically at the role played by the dramatic relative increase in womens enrollment in two-year colleges. With independent cross-sections developed using NLSY data, the authors find that the gender wage gap narrowed by 0.0469 log points between 1985 and 1990 and by 0.0932 log points between 1989 and 1994. The more pronounced decrease observed for 1989–94 is largely explained by erosion of male-female differences in weeks worked, job tenure, and full-time employment. A more novel finding is evidence that while change in the quantity of education provides essentially no explanatory power, disaggregating education by two-year and four-year providers and by major field of study accounts for 8.5–11% of the closing of the wage gap over the 1989–94 period.

The effect of community colleges on changing students' educational aspirations

Abstract The education literature provides numerous estimates of community college diversion and democratization effects measured in terms of educational attainment. Kane and Rouse [J Econ Pers 13 (1999) 64] suggest testing for diversion by comparing the impacts of two-year and four-year colleges on the changes in educational aspirations that underlie actual years of schooling completed. Using NLSY data, we obtain community college “differential aspirations effect” estimates that range from as high as −0.68 of a year to as low as our preferred estimate of −0.43 of a year. We put these estimates in perspective by showing that they are less than half of the conventionally measured diversion effect estimated for our sample. Regarding democratization, we find that attending a community college results in a substantial expansion in the educational aspirations of students (our “incremental aspirations effect”), regardless of their family backgrounds and race and ethnicity.

Workplace Transformation and Worker Upskilling: The Perspective of Individual Workers

How common is workplace transformation in the American economy? What are its implications for workforce skill requirements and training investments? The existing literature addressing these questions is based on firm-reported survey data. Using new data available in the 1993 wave of the NLSY, this paper examines the same questions from the perspective of individual workers. Our empirical results suggest that workplace transformation is commonplace. Fully 40 percent of private sector workers surveyed report that in the space of just one year, a change occurred at work that required them to learn new job skills. About 23 percent of all respondents reported experiencing a workplace change we term an organizational transformation. Incidence of formal training is positively related to indicators of organizational transformation, but the effect of these indicators is found to be sensitive to the inclusion of other important workplace change variables (namely, new products, new equipment and new government regulations). While we expected to find strong positive relationships with product development and physical capital investment, government regulation has a surprisingly large impact on formal training.

Male-female differences in the potential for union growth outside traditionally unionized industries

Using recent NLS data on preferences for union representation, this paper examines whether differences by sex exist in the potential for union organizing outside of traditionally unionized industries. The methodology distinguishes between workers’ preferences for union representation and the relative supply of union jobs in explaining interindustry differences in the extent of unionization. Within the private sector, women employed in industries other than those traditionally unionized are found to have at least as strong a preference for unionization as do comparable men but a considerably lower opportunity for unionized employment given the desire for union representation. Comparing the public sector with traditionally organized industries, the greater extent of unionization in the public sector is largely explained by a stronger desire for union representation on the part of both male and female public sector employees.

The Effect of Unionism on Workers' Valuation of Future Pension Benefits

This paper investigates the impact of unionism on the pension benefits workers expect to receive on retirement. The valuation of future benefits by workers, rather than actual employer expenditures on pensions, is examined because expected benefits should be the more important variable in explaining the labor market behavior of individual workers. Analysis of data for middle-aged men, taken from the National Longitudinal Surveys, suggests that union workers are more knowledgeable than nonunion workers about their retirement benefits, and also the average union worker expects to receive a pension higher than that expected by the average nonunion worker. More specifically, among firms providing pensions, the expected benefits are actually lower in union firms than in nonunion firms, but that difference is outweighed by the fact that nonunion firms are much more likely than union firms to have no pension plan at all.

Unions and nonwage racial discrimination

Examines racial differences in the union impact on nonwage labor outcomes, the exit propensity of individual workers, and opportunities for occupational upgrading. Determinants of exit behavior; Discriminatory practices of industrial unions; Results for exit behavior. (Abstract copyright EBSCO.)