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What distinctions are there between vocational (career and technical) education and academic learning in college? In this essay, we compare broad academic and vocational program goals, embodied skills, tasks, and jobs, with a focus primarily on community college students. There is considerable overlap between the two types of education, so a separation of tracks presents a false dichotomy. In addition, vocational certificates, which often have little academic content, have attracted attention lately as a path to good jobs. New evidence indicates that degrees offer more substantial advantages than certificates in the labor market. We argue for an alternative framework for thinking about the optimal accumulation of skills in college. Rejecting the traditional distinction between vocational education and academic learning, we posit that educational paths are best understood as accumulations of general education followed by terminal work-related education. We label this the Gen-Tech framework and consider its explanatory power and implications for colleges and students.

In this chapter, we describe the ingredients method as a simple but formal way to estimate costs for the purposes of benefit-cost analysis. The ingredients method distinguishes between input quantities and prices; the product of quantities and prices yields an estimate of the total social cost of an intervention, program or policy. We begin by clarifying what is meant by “cost†and why budgetary information is unlikely to be adequate for cost analysis. We then describe the ingredients method – how to identify inputs and price out these inputs so that they reflect opportunity cost. Next, we explain why the ingredients method is preferred in terms of transparency, informational content, and ease of sensitivity testing. We conclude with an exercise that illustrates how the ingredients method is applied and why it is preferred to alternative costing methods.

Educational interventions are complex: Often they combine a diagnostic component (identifying student need) with a service component (ensuring appropriate educational resources are provided). This complexity raises challenges for program evaluation. These interventions, which we refer to as service mediation interventions, affect additional resources students receive that mediate the impact measured. Evaluations of these types of programs that solely report effects are potentially misleading. Cost-effectiveness analysis clarifies the importance of assessing service-mediated receipt for evaluation purposes. We illustrate our argument empirically from City Connects, a comprehensive student support intervention. We find that the direct costs of the program represent only one-third of the total change in resource use by program participants required to produce impacts. Evaluative statements of service mediation interventions should be accompanied by information on the full costs to achieve effects. Many interventions might be structured in this way and require evaluation that includes an economic perspective.

This chapter reviews the evidence on the labor market returns to investing in a college education for students in the U.S. First, we describe the primary method used to estimate the return on investment and catalog the main datasets used. We then summarize the available evidence on the returns to different awards and other types of investment. We show how earnings gains clearly vary with the incremental level and quality of postsecondary education. Completing a bachelor’s degree is associated with large gains in earnings amounting to at least one-quarter million dollars on average over the lifetime. Completing an associate degree is associated with sizeable and persistent earnings advantages over no college award. Completing a certificate can yield earnings gains, but these are variable and may only be temporary. Looking at field of study and college characteristics, we also find clear evidence of variability in returns. Finally, we consider the skills of college students need, both in their current occupations and in the future as robots and computers impact on what workers do. Overall, we find most college investments to have strong labor market pay-offs and that these pay-offs are unlikely to diminish in the near future.

There is a growing body of research emphasizing the advantages of teaching students social and emotional (SE) skills in school. Here we examine the economic value of these skills within a benefit-cost analysis (BCA) framework. Our examination has three parts. First, we describe how the current method of BCA must be expanded to adequately evaluate SE skills, and we identify important decisions analysts must make. Second, we review the evidence on the benefits of SE skills, again noting key methodological issues with respect to shadow pricing. Finally, we perform BCA of four selected social and emotional learning (SEL) interventions: 4Rs; Second Step, Life Skills Training; and Responsive Classroom. These analyses illustrate both methodological and empirical challenges in estimating net present values for these interventions. Even with these challenges, we find that the benefits of these interventions substantially outweigh the costs. We highlight promising areas of research for improving the application of BCA to SEL.

Talent Search was created to improve high school completion and college enrollment for disadvantaged students. Since the program’s inception in 1967, there has not been a valid study on its economic value. In this paper, we perform a full economic evaluation, yielding direct information on the value of Talent Search and highlighting key methodological issues relating to economic evaluations of education programs. We provide rigorous estimates of social costs using the ingredients method. Using prior estimates of impacts from Constantine et al. [(2006). Study Of The Effect of The Talent Search Program On Secondary And Postsecondary Outcomes In Florida, Indiana And Texas: Final Report From Phase II of The National Evaluation. Washington, DC: U.S. Department of Education Office of Planning, Evaluation and Policy Development, Policy and Program Studies Service], we perform a cost-benefit analysis based on new estimates of shadow prices. Finally, to examine site-specific differences in impacts and costs, we undertake cost-effectiveness analysis and derive confidence intervals that illustrate key sensitivity issues. Regarding costs, we find significant resource use beyond federal funding amounts; but we also find that the present value benefits of Talent Search almost certainly exceed the present value of costs by a substantial margin. With regard to cost-effectiveness, we find significant differences across sites and extremely wide confidence intervals. We conclude with an outline of key research issues that need to be addressed to enhance future economic evaluations in educational settings with wide site-specific variation.

Cost-effectiveness analysis is rarely used in education. When it is used, it often fails to meet methodological standards, especially with regard to cost measurement. Although there are occasional criticisms of these failings, we believe that it is useful to provide a listing of the more common concerns and how they might be addressed. Based upon both previous projects on the subject and a recent project that attempted to construct cost-effectiveness comparisons from the What Works Clearinghouse of the Institute of Educational Sciences of the U.S. Department of Education, we have identified a set of recommendations for practice that should have high priority if we are to construct valid cost-effectiveness comparisons for policy uses when choosing among alternative educational interventions.

In this article, we perform cost-effectiveness analysis on interventions that improve the rate of high school completion. Using the What Works Clearinghouse to select effective interventions, we calculate cost-effectiveness ratios for five youth interventions. We document wide variation in cost-effectiveness ratios between programs and between sites within multisite programs, reflecting differences in resource use, program implementation, and target population characteristics. We offer suggestions as to how cost-effectiveness data can be used to inform policymaking, with the goal of improving the efficiency with which public and private resources are employed in education.

Community colleges are under pressure to improve completion rates and efficiency despite limited economic evidence on how to do so and the consequences of different reform strategies. Here, we set out an economic model of student course pathways linked to college expenditures and revenues. Using detailed data from a single college, we calculate baseline efficiency and differences in efficiency for students who follow different pathways. We simulate changes in output, expenditures, revenues, net revenues, and efficiency assuming that the college meets performance targets. We find substantial differences in efficiency across pathways and significant differences in efficiency across strategies to help students complete college. The model has wide practical application for community colleges.

In ShortCost-cutting policies have hurt community college student outcomes and weakened the capacity of those colleges to produce returns to students and taxpayers.Many colleges are instituting ref...

The authors examined school readiness from the parental perspective, focusing on parents’ efforts and expectations for kindergarten in conjunction with their child's academic development. Using self-reported survey data from two waves of the National Household Education Surveys, the authors tested for changes in school readiness between 1993 and 2007 and related these changes to the expansion of preschool enrollment. Over the 14-year period, there was a significant increase in parental reports of child development and a heightened set of expectations for what parents viewed as essential for entry into kindergarten, but results indicated only modest changes in parent effort. Preschool enrollment was strongly associated with child development, and although preschool has expanded, the association was stronger in the more recent period. Preschool enrollment did not displace parental effort—they were moderately positively correlated—nor did it appear to play a strong role in shaping parental expectati...

This paper examines the institutional determinants of federal loan status for a recent cohort of college students. We first set out how institutions influence loan accumulations and repayment rates, with particular focus on for-profit colleges. We then test a set of hypotheses about loan status and repayment using national data on loans, defaults, and repayments merged with college-level data. For all measures of loan status there are significant raw gaps between for-profit colleges and public and not-for-profit colleges. After controlling for student characteristics, measures of college quality, and college practices, large gaps in loan balance per student remain: students in for-profit colleges, especially the 2-year colleges, borrow approximately four times as much as they would have at a 2-year public college. For a student attending the ‘average’ college, their repayment rate is predicted to be 5 [9] percentage points lower if that college is for-profit compared to public [non-profit]. Repayment rates are also lower for colleges with higher proportions of minority students and with lower graduation rates; contrary to some claims, single-program institutions appear to have higher repayment rates.

This article reviews the existing literature on the economic and other benefits of attending community college. First, the article reports on the earnings gains across all students and reviews the evidence for subgroups by gender, minority status, and credits accumulated. The article then reviews the methodological challenges associated with calculating earnings gains from attending a community college. Despite these challenges, the evidence for the significant earnings gains from community college attendance appears to be compelling. The second part of the article reviews the literature on a broader spectrum of gains, such as health, crime, and welfare reliance. This literature is very limited and potentially offers an important area for further research to establish the full returns from community college attendance.

The wage and job satisfaction impacts for over-educated workers have been well-documented; yet little attention has been paid to the consequences for firms. In this paper we examine over-education from the perspective of the workplace. Using linked employer–employee data for the United Kingdom, we derive the standard worker-level penalties on wages and job satisfaction. We then show how over-education rates across workplaces adversely influence workplace pay and workplace labor relations. For individual workers who may be at-risk of over-education, we also distinguish between workforce composition effects and workplace labor practices, such as hiring. The effect of over-education on job satisfaction is particularly strong and its effects are evident at the workplace level. Our results suggest that investigations of over-education at the level of the firm are a promising area of inquiry.

This article offers a replication for Britain of Brown and Heywood's analysis of the determinants of performance appraisal in Australia. Although there are some important limiting differences between our two datasets — the Australia Workplace Industrial Relations Survey (AWIRS) and the Workplace Employment Relations Survey (WERS) — we reach one central point of agreement and one intriguing shared insight. First, performance appraisal is negatively associated with tenure: where employers cannot rely on the carrot of deferred pay or the stick of dismissal to motivate workers, they will tend to rely more on monitoring, ceteris paribus. Second, employer monitoring and performance pay may be complementary. However, consonant with the disparate results from the wider literature, there is more modest agreement on the contribution of specific human resource management practices, and still less on the role of job control.

Theory and evidence on performance-related pay for teaching remain inconclusive. Teachers will respond to rewards, but an appropriate reward structure may not be devised because education is a collaborative endeavor. Here we test three hypotheses: performance-related pay among teachers is more likely to be observed when there are evident indicators of team production; teachers receiving performance pay will earn more in total than otherwise equal teachers without performance pay; and teachers receiving performance pay should have higher job satisfaction. We use the Schools and Staffing Survey (2000) to test each hypothesis. Team production does strongly predict performance-related pay, and that such pay does boost earnings, but that job satisfaction is lower for those who receive such pay awards.

This paper calculates the public savings (financial benefits) from greater public investments in the education of African-American males. Over one-fifth of each age cohort of black males in US is not a high school graduate. We identify five interventions that would—based on credible research—increase the graduation rate; we also report the public cost of each intervention. We then calculate the lifetime public benefits in terms of increased tax revenues and lower spending on health and crime. In present values, for a black male aged 20, these public benefits amount to $256,700 per new graduate and the median intervention would cost only $90,700. The benefit/cost ratio is 2.83. Simply equating the high school graduation rate of black males with that of white males would yield public savings of $3.98 billion for each age cohort. These results suggest that increased investments in education for black males at risk of dropping out of high school should be an economic priority.

This paper presents an updated cost-benefit analysis of the High/Scope Perry preschool Program, using data on individuals aged 40. Children were randomly assigned to a treatment or control group. Program costs are compared against treatment impacts on educational resources, earnings, criminal activity, and welfare receipt. Net present values are calculated for participants, the general public, and society. The treatment group obtains significantly higher earnings. For the general public, higher tax revenues, lower criminal justice system expenditures, and lower welfare payments easily outweigh program costs; they repay $12.90 for every $1 invested. However, program gains come mainly from reduced crime by males.

This article derives an updated cost-benefit ratio for the High/Scope Perry Preschool Program, an intensive preschool intervention delivered during the 1960s to at-risk children in Ypsilanti, Michigan. Because children were randomly assigned to the program or a control group, differences in outcomes are probably attributable to program status. Data on outcome differences is now available on participants as they reached the age of 40; outcomes include educational attainment, earnings, criminal activity, and welfare receipt. These outcomes are rendered in money terms and compared to the costs of delivering the program to calculate the net present value of the program both for participants and for society. The data show strong advantages for the treatment group in terms of higher lifetime earnings and lower criminal activity. For the general public, gains in tax revenues, lower expenditures on criminal justice, lower victim costs, and lower welfare payments easily outweigh program costs. At a 3% discount rate the program repays $12.90 for every $1 invested from the perspective of the general public; with a 7% discount rate, the repayment per dollar is $5.67. Returns are even higher if the total benefits—both public and private—are counted. However, there are strong differences by gender: a large proportion of the gains from the program come from lower criminal activity rates by the treatment group, almost all of which is undertaken by the males in the sample. The implications of these findings for public policy on early childhood education are considered.

The economic model of education policy assumes that there is a substantial consensus on educational goals among constituencies and that the major challenge is to determine the most effective strategies for reaching those goals. Unfortunately, the debate over educational vouchers is complicated by the presence of multiple and competing goals, and mixed and ambiguous evidence. The result is that differences in conclusions on the effectiveness of vouchers largely mirror interpretations that are conditioned heavily by competing ideologies rather than straightforward facts. The primary conflict is between what we term “libertarian” and “social contract” positions. Libertarians believe that freedom of choice should be the highest priority of voucher reforms and assume that a private marketplace with increased options will promote greater efficiency and (possibly) equity. Advocates for a social contract maintain that education generates important positive externalities that are best promoted through a free, publ...

Using linked workplace–worker data for the UK, a number of hypotheses are tested related to individual gender and the gender composition of the workforce. The proportion of female workers per establishment is strongly negatively associated with median workplace pay. There is some evidence that workplace performance (but not employment size or growth) is positively associated with the female–male workforce ratio. For workers, the female wage penalty (which is substantial) is strongly influenced by the female–male workforce ratio. In addition, commensurate with gender discrimination, those who manage female workers receive lower wages but professional workers in the same establishments do not.

This article describes the teaching profession and teacher labour market in the US. Over the period since 1966, the profession has become 80% female, highly credentialled, considerably more senior, and increasingly unionized. In contrast, formal working conditions have changed relatively little, although class sizes are now approximately 30% smaller. Real earnings growth in teaching has been flat, although this is not atypical of wage trends across the US labour market. The main distinction between teaching and other professions is the flexibility in setting of pay and conditions. Teachers are paid on a uniform pay schedule, with little variation in terms of performance, and with strong collective bargaining. Reforms to this labour market are direct (liberalization of pay‐setting and improvement in working conditions) and indirect (organizational changes to allow new teachers to enter the profession). The latter appear more promising. Given the seniority of the teaching profession there is likely to be li...

This paper estimates the effect of a state-imposed curriculum mandate on the academic achievement of US public school students. By 1998, 14 states across the US had mandates that high school students should take an economics course. For these states, the proportions of public schools students taking high school economics was around twice that of states without mandates. A curriculum mandate may be interpreted as an exogenous constraint on the production of more general academic achievement by students. Where there is a mandate to provide instruction in a particular subject, general academic test scores might be affected. Using a range of estimation techniques applied to a dataset of almost 600,000 public school students across the US, we find that students who are mandated to take economics post substantially lower scholastic aptitude test (SAT) scores. The mandate reduces test scores by around 0.08 standard deviations for those students who would not otherwise have enrolled. Such effects are not found for three other non-mandatory subjects—French, German, and biology—which in contrast convey a strong SAT premium.

We investigate the desire of nonunion workers in Great Britain to become represented by unions. Comparing our results to those from the United States, we find that workers in Great Britain are less likely to desire unionization and express lower dissatisfaction with their influence at work. The determinants of the desire for unionization are estimated controlling for a wide variety of individual and workplace variables. The roles of human resource management and employee involvement are isolated. We identify direct work-place and worker-level effects of these practices in reducing the desire for unionization and an indirect effect operating through the influence of employee relations, a major determinant of the desire for unionization. Also, we identify characteristics of co-workers that are associated with desire for unionization and examine the role information revelation may play in managerial strategies to forestall unions.

Sequential analyses of the major workplace data sets available to British researchers—the cross-sectional Workplace Industrial/Employee Relations Surveys (WIRS/WERS)—have revealed shifts in some previously well-established associations between union presence and firm performance, so much so in fact that it has become conventional to speak of a pronounced reduction in the “disadvantages of British unionism.” One finding that seems to have persisted in cross section, however, is the negative effect of unions on employment growth. Following on a recent study in this Journal, we reexamine the issue using employment data from a panel of firms surveyed at two points in time rather than a single cross section. We report similar evidence of employment retardation in union regimes. On the other hand, the new data also suggest that some other unfavorable union effects may be longer-standing than previously reported.

This paper employs a random sample of matched employer–employee data from the UK to test seven possible explanations for the positive relationship between employer size and pay. Individual wage equations show a large employer size–wage premium. We then control for a range of establishment-level variables, based on seven hypotheses typically advanced to explain this premium. Each establishment-level factor reduces the wage premium, but a sizeable premium nonetheless remains. In adjudicating on these hypotheses, we find a strong association between the internal labour market and the employer size–wage premium. This finding supports the theory that the employer size–wage effect may be due to the higher costs of turnover or monitoring in larger firms. However, we find contrasting effects for public versus private sector establishments.

An individual's human capital has a strong influence in earnings. Yet, individual worker‐level estimations of earnings rarely include the characteristics of co‐workers or detailed firm‐level controls. In particular, co‐workers skills are ignored which may be particularly significant where team work is important. This paper utilises a unique matched work‐place data set to estimate the effect on the earnings of co‐workers' education and training in the Hotel and Catering sector, which contains a high proportion of low paying establishments and in the Retail sector which contains a large absolute number of low paying establishments. The data are derived from the 1998 British Workplace Employment Relations Survey. This is a national sample based on interviews with managers in 2,191 establishments with at least ten workers. In addition, a survey of up to 25 randomly selected employees in each establishment was undertaken which included questions on education, training, pay and job satisfaction, as well as a range of other personal and workplace characteristics. We have, therefore, a matched workplace employee sample which is essential for this type of analysis. The results suggest that there are strong co‐worker effects in the earnings of individuals when controlling the individual's own level of education. While there are also high returns to training for individual workers, there are no similar spillover effects from the training of co‐workers in these sectors. Nevertheless, this suggests that there could well be a pay‐off to the professionalisation of service sector jobs.

This paper investigates the determinants of political support for the privatization of education in the UK. In pledging support, the electorate is assumed to form opinions about the effects of education policies and reforms and then apply cost-benefit calculations, depending on their circumstances. Based on assumptions about the effects of a reform and the cost-benefit calculus, it is possible to identify which voters would oppose or advocate educational reforms such as greater school competition, ability selection and promotion of private schooling. Support for these reforms is then estimated using the British Educational Panel Survey (1997). The results indicate that political preferences largely reflect the anticipated personal costs and benefits from educational reforms. Those with children are in favour of reforms to raise school competition; those working in the education sector are against such reform. Those with higher anticipated tax liabilities favour privatization and support private schooling....

EU legislation mandating European Works Councils (EWCs) was enacted in 1994. Although much descriptive information on the content of EWC agreements exists, little is known of the determinants and impact of these new institutional arrangements. In the present treatment, we exploit a question on EWC status in the 1998 Workplace Employee Relations Survey to provide the first econometric investigation of the determinants of (largely) voluntary transnational councils and their potential effect on establishment performance and employee attitudes. Many of the sharper criticisms of EWCs are not substantiated in the data, even if the benefits appear muted.

This paper describes the trend towards the privatization and marketization of US schooling across three domains. We begin by describing the trend in recent pro-market policy reforms — proposed or enacted — to US schooling. This reform trend can be explained in terms of the growing importance of economic theory and economic evidence in social and political discourse. Briefly, we review mainstream economic theory and evidence to see what general lessons can be drawn, with a focus on productive efficiency. In the main section of the paper, we look at the direct evidence for US schooling not only in terms of the productive efficiency of schools, but also equity in schools, freedom of choice for parents and students, and the social cohesion produced by schools. Our review reaches a number of conclusions which suggest that the trend toward privatization and marketization may generate greater productive efficiency. Although the economic analysis is deficient in several ways and may have limited pertinence for social goods such as education, it highlights the need for strong and effective systems of accountability. Regardless of whether the advantages outweigh the disadvantages, however, it may be difficult to prevent further steps toward marketization.

This article systematically reviews U.S. evidence from cross-sectional research on educational outcomes when schools must compete with each other. Competition typically is measured by using either the Herfindahl Index or the enrollment rate at an alternative school choice. Outcomes are academic test scores, graduation/attainment, expenditures/efficiency, teacher quality, students’ post-school wages, and local housing prices. The sampling strategy identified more than 41 relevant empirical studies. A sizable majority report beneficial effects of competition, and many report statistically significant correlations. For each study, the effect size of an increase of competition by one standard deviation is reported. The positive gains from competition are modest in scope with respect to realistic changes in levels of competition. The review also notes several methodological challenges and recommends caution in reasoning from point estimates to public policy.

A significant body of literature suggests that enterprises in the public education sector may differ from 'standard production' market firms in important ways. Substantial government involvement is then legitimized. However, this literature often uses within-sector comparisons of school types, rather than cross-sector comparisons of the education sector with other sectors. This paper compares the structure of education enterprises and workplace practices with those in other industries, namely (the rest of) the public sector and the private sector. Key differences - particularly as regards staffing resources - between education providers and these other enterprises are identified from prior literature and then tested. Data from the UK Workplace Employee Relations Survey (1998) are used. Our findings show substantial differences in labor rewards and factor management in the education sector. The WERS98 has been provided by the Data Archive at Essex University.

Using ordered probit estimation technique this paper examines the job satisfaction of recent UK graduates. Focussing primarily on explaining job satisfaction in terms of individuals matching to jobs, with the match depending on reservation returns, information sets and job offer rates. Only limited support can be found for the argument that job matching explains higher job satisfaction. In addition, stylizing graduates as a peer group, who form satisfaction levels based on their rankings relative to each other we examine whether or not education quality, which raises peer group status and increases the job offer rate, is systematically related to job satisfaction. The results broadly support the hypothesis that job satisfaction is neutral across graduates of different education qualities. However, our specification tests indicate that ordered probit estimation may not be fully appropriate for identifying the characteristics of those with high job satisfaction.

This paper presents the first examination of the effect of unionisation on the distribution of nonunion wages in the UK. We test a hypothesis that has received considerable attention in the US: that the threat of unionisation leads nonunion firms to increase the earnings of their lowest paid workers, so compressing their internal wage distribution. In aggregate we find little support for this hypothesis in the UK and suggest that the supportive evidence from the US may be a function of the absence of suitable linked employer‐employee data.

This paper relates educational resources in higher education (HE) to labour market earnings for UK graduates. A positive relationship between (various types of) resources deployed and earnings is tested for, using data on UK graduates. Although basic correlations show a positive relationship between per unit resources and student–staff ratios with subsequent earnings, these correlations are significantly reduced when other controlling factors are included. The magnitude of any improvement in earnings from an increase in resources deployed in HE is estimated. The elasticity of earnings with respect to resources is also estimated.

We examine the determinants of establishment performance in the UK, using cross-sectional data from the 1998 Workplace Employee Relations Survey to replicate research by Fernie and Metcalf (1995) who used data from the 1990 Workplace Employee Relations Survey; specifically, we test whether employee representation, contingent pay and efforts to boost employee participation affect a set of economic and industrial relations outcome indicators in the manner they suggest. We also re-estimate the influential WERS90-based study of Machin and Stewart (1996) on the links between union status and financial performance. In both cases we report very different results.

This paper sets out the benefits and costs of continuing professional development (CPD) for general dental practice. These considerations are important in evaluating CPD yet they are rarely formally assessed. This paper draws on literature specifically on dentistry but also from across the medical profession and the economics of education and training. First, the costs of CPD are itemised with some suggestions as to how costs may be reduced. Second, the benefits are identified and the (limited) evidence on the value of CPD is surveyed. Finally, reasons why some GDPs might not undertake sufficient or appropriate CPD are explored and the need for guidance for dental practitioners is identified.