321_09_slides10

321_09_slides10 - Review: Evaluating Statistical Analysis...

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Review: Evaluating Statistical Analysis Econ 321 Introduction to Econometrics Econ 321-Stéphanie Lluis 1
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Article Illustration “Why Do Employers Pay for College?” by Peter Cappelli
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What Do We Learn in the Introduction? Issue Large majority of employers pay for post-secondary education Do they get the returns from investing in their employees? How do they recoup the cost? Facts 86% of employers offer tuition reimbursement plans (1992) 79% offer educational assistance of various kind (SHRM 2002)
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Review Literature & Develop a Theoretical Model Relevance of the question Why do employers finance post-secondary education for their current employees? The skills are general and therefore easily transferable across employers All the benefits from increased education transform into greater wage which is an extra cost for the employer (although it’s assumed to come with greater marginal productivity at work) The employer could hire individuals who already possess the skills and not incur the education cost
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Review Literature & Develop a Theoretical Model Potential explanation proposed in the literature The employer would recoup by paying workers below market levels after they get the education Employees indirectly pay for tuition The extra cost of tuition reimbursement comes at an important benefit for the employer: the advantage of learning about the best quality employees (those who will self-select into these education programs) Probation period Delay before using plan
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Objectives Modeling the relationship between tuition assistance and educational attainment of current employees Emphasize selection effect Analyze the effect on wages Analyze the effect on turnover
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321_09_slides10 - Review: Evaluating Statistical Analysis...

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