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The returns to community college schooling for displaced workers (Jacobson et al. 2001)

Absence of conflict of interest.

Citation

Jacobson, L., LaLonde, R., & Sullivan, D. G. (2001). The returns to community college schooling for displaced workers. Retrieved from: https://files.eric.ed.gov/fulltext/ED481841.pdf

Highlights

  • The study's objective was to examine the impact of community college schooling on displaced workers’ earnings and employment outcomes. This summary focuses on the Washington State sample.
  • The study used a nonexperimental design to compare the earnings and employment outcomes between displaced workers who completed community college schooling and displaced workers who did not receive such schooling. Using state unemployment insurance earnings records and community college transcripts, the authors conducted statistical models to examine the differences in outcomes between the groups.
  • The study found that displaced workers who completed at least one community college course earned more than displaced workers who either did not enroll in community college courses or who enrolled but did not complete any courses. The study also found community college schooling to be associated with higher hourly wages and number of hours worked for both males and females and higher employment rates for females only. However, the authors did not provide tests of statistical significance.
  • The quality of causal evidence presented in this report is moderate because it was based on a well-implemented nonexperimental design; this is the highest causal evidence rating possible for a nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to enrollment in community college, but other factors might also have contributed.

Features of the Study

The authors conducted a non-experimental comparison group analysis to examine differences in earnings between displaced workers who completed community college schooling and displaced workers who did not receive such schooling. Displaced workers are defined as prime-aged adults who were laid off from jobs from a variety of industries. Community colleges can receive government funds to place displaced workers into specifically designed vocational training programs that offer noncredit courses tailored to their needs. However, displaced workers can also be enrolled into more mainstream programs with younger non-displaced workers and earn college credits.

To construct the study sample, displaced workers were identified using state unemployment insurance earnings records. The study sample consisted of over 85,000 displaced workers from Washington State, who were displaced from their jobs between 1990 and 1994. The workers had three or more years of job tenure and were permanently laid off from their jobs. Most individuals included in the sample had attended college before their job loss and acquired education beyond high school. The average age was approximately 35 for males and 37 for females. The treatment group included about 21,000 workers and was established by matching their unemployment records to their community college transcripts. The comparison group was composed of over 64,000 displaced workers who did not enroll in any community college courses. The authors also ensured that the sample only included workers with a strong work history in the Washington State workforce.

The study used data from state unemployment insurance earnings records and community college transcripts. The authors used statistical models to compare the earnings of treatment and comparison group members. The authors also evaluated the impact of community college schooling on hourly wages, number of hours worked, and employment rates by comparing a sub-sample of the treatment group who completed community college courses to those who enrolled but did not complete any courses. However, the study did not include tests of statistical significance

Findings

Earnings and wages

  • The study found male displaced workers who completed at least one community college course earned an average of $63 more than other displaced workers in the comparison group with a long-term impact on earnings resulting in an average increase of $261 for male displaced workers.
  • The study found female displaced workers earned an average of $18 more than their comparison group counterparts just one quarter after completing community college courses, with long-term impacts on earnings resulting in an average increase of $147.
  • Although the study found community college schooling to be associated with increases in hourly wages, the impact was relatively small, where community college schooling raised hourly wages by less than 2 percent for both male and female displaced workers.
  • However, the study found schooling to have a larger impact on overall earnings, where an average increase in earnings of 5 to 6 percent was found for individuals who completed at least one year of community college schooling.

Employment

  • The study found that community college schooling was associated with an increase in the number of hours worked for both male and female displaced workers.
  • The study also found community college schooling to be associated with a modest increase in quarterly employment rates for females only.

Considerations for Interpreting the Findings

The authors state that the estimates used in their models controlled for fixed unobserved characteristics in the sample that might influence both earnings and individuals' decisions to acquire training following the loss of a job. However, there is still the possibility that there were other underlying factors that differentiated between individuals who chose to enroll in community college courses and individuals who did not.

Causal Evidence Rating

The quality of causal evidence presented in this report is moderate because it was based on a well-implemented nonexperimental design; this is the highest causal evidence rating possible for a nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to enrollment in community college, but other factors might also have contributed.

Reviewed by CLEAR

January 2021

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