Chapter 1: Introduction
Research & Planning (R&P) is a separate exclusively statistical entity within the Wyoming Department of Workforce Services. R&P collects, analyzes, and publishes timely and accurate labor market information (LMI). LMI is an applied science; it is the systematic collection and analysis of data which describes and predicts the relationship between labor demand and supply.
Prediction results in informed decision making. If we can predict that a certain type of training or education results in gaining well paid employment, the effort and expense of education can clearly be justified and a return on investment realized. This report is aimed primarily at publishing information about the role of education and the value of education in the market with a focus on the job seekers interests in informed decision making.
Informed decision making for job seekers can take many forms, from long-term career counseling to assisting groups of dislocated workers in choosing the best short-term training option to meet their financial needs. Focusing on the job seeker for this publication is not intended to disregard the full range of interests in student outcomes by other customers of LMI. Indeed, selecting one customer to focus on at the expense of others, would be inconsistent with R&P’s mission, which is “to establish an empirically based comprehensive understanding of the labor market: its constituent elements, systems integrating its components, and subsequent outcomes.” By focusing primarily on one customer, we make this publication manageable and will return another time to focus on other constituencies who will also find this publication of substantial interest.
What are Wage Records?
Many of the chapters in this publication reference wage records, specifically R&P’s Wage Records database. Wage records represent an individual’s wage history based on employers’ quarterly wage and employment reports to the Unemployment Insurance (UI) tax section of the Wyoming Department of Workforce Services. Bullard (2015) stated that UI covered employment represents approximately 91.5% of Wyoming’s total wage and salary employment.
As noted by Gosar (1995):
“Wage records are an administrative database used to calculate UI benefits for employees who have been laid-off through no fault of their own. By law, each employer who has covered employees, must submit tax reports to the state showing each employee’s wage. The required information on this tax report includes social security number (SSN) for each covered employee, year, quarter, and wages earned in the quarter.”
References
Bullard, D. (2015). Local jobs and payroll in Wyoming in first quarter 2015: job losses appear in the oil & gas sector. Wyoming Labor Force Trends, 52(10). Retrieved June 6, 2016
Gosar, W. (1995). Wyoming unemployment insurance wage record summary statistics - a new way to look at Wyoming. Wyoming Labor Force Trends, 32(5). Retrieved June 6, 2016
As the review of the literature (Chapter 2) reveals, determining the pecuniary value of training and education is a question receiving increasing attention from the perspectives of both personal investment and public policy. Since the mid-1990s, the term earnings outcomes has most often come to mean earnings from administrative records, and it references the Social Security Administration’s annual reports on wage and salary income or the earnings of wages from the state administered Unemployment Insurance (UI) program (UI wage records). Within U.S. Department of Labor employment and training operations, quarterly UI worker earnings — or wage records — have become the standard for reporting earnings. R&P used wage records in the research behind this report on student outcomes. Interpreting quarterly wage records earnings is problematic; in fact, an individual is considered employed if he or she worked in only one week of the quarter or worked all three months of the quarter. Moreover, given these differences for one week and three months, the ability of workers to find steady employment is highly correlated with age, gender, seasonal opportunities in local markets, and participation in education and training programs.
Chapter 3 focuses on one strategy: it measures steady work as a proportion of all work and its impact on earnings, to help the reader understand factors other than educational attainment that explain earnings change. As the report develops, we move toward a more familiar measure of compensation by using hours worked from another employment related administrative data base to apportion earnings change among such factors as licensure attainment, maturity, establishing job commitment as well as educational attainment as explanations for earnings change.
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Chapter 4 presents a longitudinal analysis of employment and postsecondary enrollment of the earliest high school 12th grade cohort for which the Hathaway Scholarship Program (HSP) was available. The senior class of 2006/07 was the first class eligible for financial support under HSP. While a minimum college entrance test score was required, there were no special high school curriculum requirements as part of Hathaway eligibility. R&P tracked these 12th grade students for seven years, or the most recent year for which wage records matches were available from 11 partner states at the time of this research. These 11 partner states are those states with which R&P has data sharing agreements: Alaska, Colorado, Idaho, Montana, Nebraska, New Mexico, Ohio, Oklahoma, South Dakota, Texas, and Utah (see Figure 1.1).
The analysis demonstrates that gender and age play a significant role in the decision of whether or not to attend postsecondary institutions. These factors also play a role in earnings attainment and when, after leaving high school earnings changes take place in association with graduation and migration. During the seven-year follow-up, males who never attended postsecondary institutions earned more than those who attained a bachelor’s degree. Earnings for males with a bachelor’s degree may exceed those males who never attain postsecondary education, but that line is crossed in an as yet examined future. On the other hand, the results also suggest that attaining a postsecondary bachelor’s level award is more important for the earnings gain of females. For females to achieve this earnings gain, it is evident that they often must find employment in another state. This chapter illustrates the importance of separating the effects on earning of age and gender from the effects of educational attainment.
Chapter 5 draws the readers’ attention to the range of career and family formation choices made in the years shortly after high school. It illustrates how gender is associated both with fields of academic pursuit at the University of Wyoming and labor market outcomes. Female academic pursuits focus on education, health professions, and related programs among 24 fields of study examined. For males, health professions ranked third among bachelor’s graduates, while business, management marketing & related was the single largest category, and engineering second among graduates. Looking at post-graduation earnings for males and females, the results are similar for the most frequently occurring degree types, with the exception of earnings for males graduating with business management falling slightly below the earnings of females who hold education degrees. While gender appears to be critical to education and career choices, earnings outcomes are a function of the genders being subject to different labor markets that may not share a common relationship to the business cycle. These facts need to be incorporated in future Hathaway analysis.
R&P’s analysts crafted Chapter 6 to introduce the reader to the Hathaway Scholarship Program as a merit-based strategy students can use to finance their education and to describe the dominant modes of financing used by students, including earnings from work. As a financing strategy: Hathaway can be viewed as having two components, curriculum requirements and financing; neither component remains constant over time. Hathaway’s success curriculum was phased in over four years and is reviewed during many legislative sessions for potential changes, while tuition at institutions of higher education is almost always responding to inflationary pressure. Analysts describe how six dominant financing strategies were developed and identify how each is associated with a particular demographic and earnings pattern that may or may not be consistent with the spring high school graduation to fall enrollment in postsecondary model pursued by most Hathaway recipients. Establishing this profile of funding strategies, work strategies, and related demographic components for the population of graduates as a whole is a pre-requisite to selecting only those resident graduating students who did not use Hathaway as the predominant means of attaining graduation as the workplace outcomes comparison group. Establishing demographic and work history equivalency between Hathaway as the predominant financing strategy, in contrast to those resident graduates who used another financing strategy, is the foundation of the logic that the only difference between the two groups of students (Hathaway) affects workplace outcomes.
Chapter 7 presents a statistical analysis of the outcomes of the Hathaway Scholarship Program by focusing on statistical tests of difference in retention in Wyoming and earnings in the eight quarters following graduation. This research is also illustrated in the presentation titled, “Wyoming’s Hathaway Scholarship Program and Workforce Outcomes” (see http://doe.state.wy.us/LMI/presentations/Hathaway_0616.pdf).
The graphics in this presentation follow males and females separately up to eight quarters after graduation. These graphics compare the results of different postsecondary financing strategies among groups who were, for all practical purposes, comparable in age, proportionately equal in gender mix, and comparable in work history while enrolled in postsecondary education. Tests of difference were carried out for UW and the community colleges as a group separately. The author of Chapter 7 found that for a small number of quarters in selected instances, there is a statistically significant difference upholding a positive effect of Hathaway in retention or earnings. However, on the whole, the results of statistical testing are equivocal, leaving the positive effects of Hathaway undemonstrated over the number of cohorts of students and the quarters available for testing.
Connecting field of study with credentialing specific to an occupation and measuring hours of employment and compensation are the subjects of Chapter 8. Health care occupations are among the fastest growing employment opportunities in the nation. The capacity to use gained knowledge in a field of study to obtain a particular credential, and having more complete information about working conditions can be important to career choice. Chapter 8 focuses on linking hours worked from the Workers’ Compensation quarterly tax filing to Wyoming State Board of Nursing files to explore working conditions for registered nurses in long-term care in selected Wyoming locations. This effort represents an exploratory attempt to fill knowledge gaps about educational outcomes. UI wage records represent the gross amount of wages paid during a quarter leaving us uncertain as to the stability of earnings and whether or not compensation changes because of a change in the rate of compensation, the number of hours worked or both. The product of the work done in Chapter 8 demonstrates the utility value of hours worked and is certain to inform the future of outcome measures in Wyoming.