Citation
Krueger, A., & Rouse, C. (1998). The effect of workplace education on earnings, turnover, and job performance. Journal of Labor Economics, 16(1), 61-94.
Highlights
- The study’s objective was to examine the impact of employer-based workplace education on wage growth at two mid-sized companies in New Jersey, one in the manufacturing sector and the other in the service sector.
- In this nonexperimental study, the authors used employee survey data and administrative records from the participating companies and the community college that provided the training to compare the wage growth of workers who participated in training with the wage growth of workers who did not participate.
- The study found that employees in the manufacturing company who participated in training had higher wage growth than those who did not participate.
- The quality of causal evidence presented in this report is low because the authors did not account for potential pre-program differences in earnings between groups in the analysis. This means we are not confident that the estimated effects are attributable to the employer-based workplace education program. Other factors are likely to have contributed.
Intervention Examined
Employer-Based Workplace Education
Features of the Intervention
Two mid-sized companies in New Jersey, one in the manufacturing sector and the other in the service sector, implemented the training program. It was designed by adult education specialists at a local community college and funded by a federal grant. Training ran from October/November 1992 through February 1994. Courses were provided on site by teachers who specialized in adult education. Classes met twice per week for two hours and were taught in five 8- to 12-week sessions. Employees were paid their regular wages during class time, and signing up was voluntary. Classes were taught during regular shift times, so employees could participate only if their absence would not disrupt the work flow. Subjects covered in the training included basic skills, such as reading, writing, math, and English as a second language. In addition, the training at the manufacturing company included occupational skills classes, such as blueprint math and blueprint reading.
Features of the Study
The authors used regression analyses to compare the hourly wages of workers who participated in training with those of workers who did not participate. The analyses were conducted separately by company and included controls for age and tenure. The sample consisted of 642 workers from the manufacturing company and 239 workers from the service company who had started with their company before the start of the training program. The study used data from the companies’ administrative records, employee surveys, and administrative records from the community college that organized and designed the training program.
Findings
- The study found a positive and significant relationship between participating in the training program and wages in the manufacturing company.
Considerations for Interpreting the Findings
The study noted large pre-program dissimilarities between treatment and comparison groups on hourly wages and the percentage of female participants. Before the program, training participants, on average, earned less per hour and were more likely to be female than nonparticipants. The analysis statistically controlled for gender, but not for wages measured at least one year before the program. This lack of statistical controls raises concerns that factors other than participation in the workplace education program could account for observed differences in post-program wages between treatment and comparison workers. Therefore, this study is not eligible for a moderate causal evidence rating, the highest rating available for nonexperimental designs.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the authors did not account for potential pre-program differences in earnings between groups in the analysis. This means we are not confident that the estimated effects are attributable to the employer-based workplace education program. Other factors are likely to have contributed.