© Copyright 2003 by the Wyoming Department of Employment, Research & Planning

The Community College Connection: Labor Market Outcomes

by: Sara Saulcy, Economist

"The majority of graduates who worked in the state during second or third quarter 2001 were 24 years of age or younger, female, and worked in the Services or Retail Trade industries."

For many years Wyoming community colleges have prepared their graduates for skilled jobs and further postsecondary education. Until recently, there has been no comprehensive statewide measure of community college graduates’ performance in the labor market. We endeavor to close that gap by exploring the extent to which Wyoming community colleges meet the career and educational goals of their graduates, and the degree to which the graduates meet the expectations of Wyoming employers. We achieve this by analyzing two important pieces of recently conducted research. First we consider the work profile of 2001 graduates of Wyoming community colleges using databases maintained by Research & Planning (R&P).¹ Then we describe selected results of the first large-scale survey of the graduates’ employers. Both sets of analyses represent groundbreaking research for R&P and Wyoming community colleges. This article highlights the findings of the complete report, which is available on our website at <http://doe.state.wy.us/LMI/CollegeReport2003.htm>.

The involvement of R&P with performance measurement began in February 2000 when Casper College and R&P designed a process for describing the interaction between Casper College graduates and the Wyoming labor market. In spring 2001 R&P conducted a pilot survey on behalf of Casper College.² The original goal of our research was to meet the training provider requirements for performance measurement outlined in the Federal Workforce Investment Act of 1998 (WIA).³ In 2002 we added Laramie County Community College, Northwest College, and Sheridan College (includes Sheridan and Gillette campuses). The goals of the research were expanded to include a focus on occupational outcomes. Our partnership also meets the needs of community colleges by supporting educational improvement and the accreditation process.

Findings

A total of 1,180 students graduated from Wyoming community colleges in May 2001. The bulk of graduates were residents⁴ of the state, who were more likely than nonresidents to work in Wyoming following graduation.

The work behavior of Wyoming community college graduates around the time of graduation tends to be a period of significant hiring and exiting, especially for younger graduates. However, this behavior tends to stabilize 12 to 18 months following graduation.

There was a total of 883 graduates from Casper College, LCCC, Northwest College, and Sheridan College in May 2001. The majority of graduates working in the state during second or third quarter 2001 (2001Q2 or 2001Q3) were 24 years of age or younger, female, and worked in the Services or Retail Trade industries. In addition, most graduates working at least six months for the same employer saw increases in wages and hours worked. However, research conducted by R&P suggests that measuring earnings six months following graduation as outlined by WIA does not adequately capture potential longer-term earnings gains by graduates.⁵ To better evaluate the impacts of education, we suggest monitoring the earnings of graduates over time with administrative data (i.e., Wage Records and student data), and by conducting surveys of employers of graduates 12 to 18 months following graduation.

Employers of Casper College, LCCC, Northwest College, and Sheridan College graduates indicate that they are generally satisfied with the graduates’ skills and work habits. However, employers report being somewhat less satisfied with the general pool of available labor, as well as the skills of the general labor supply.

Employment

R&P analyzed employment and wage data of graduates during the quarter of graduation, second quarter 2001 (2001Q2), through first quarter 2002 (2002Q1). The percentage of graduates with wages reported in Wyoming or in a state with which we have a Memorandum of Understanding (MOU) for data sharing (hereafter referred to as an MOU state) declines from 70.3 percent in 2001Q2 to 58.5 percent in 2002Q1 (see Figure 1). This decrease indicates that graduates are leaving the state and regional labor markets. These graduates (as well as others not working in the state) may have gone on to the University of Wyoming or other institutions of higher education, relocated to a non-MOU state, or secured employment in a non-Unemployment Insurance (UI) covered job.⁶

Wyoming residents are more likely to be found working in the state than nonresidents. As Figure 2 indicates, 73.8 percent of Wyoming residents had wages in the state during 2001Q2, compared to only 26.9 percent of nonresidents. Results were similar in all other reference quarters, but declined to a low in 2002Q1 (58.7 percent of residents and 9.0 percent of nonresidents).

Employment Change

As mentioned earlier, graduation is very dynamic in terms of job changing activities. For purposes of this article, we define Non-Transitioners as those individuals who, during a given quarter, were continuously employed by the same employer. By comparison, graduates involved in turnover activities such as being rehired, exiting a job, or entering a new job are referred to as Transitioners. Individuals employed at graduation are considered incumbent workers.

The majority of graduates shown in Table 1 in second and third quarter 2001 are Transitioners (62.1% during 2001Q2 and 61.3% during 2001Q3). Non-Transitioners have higher wages than Transitioners. However, during these two quarters Transitioners show an increase in quarterly wages while Non-Transitioners show a slight decrease. Although there is an advantage to stable employment for Non-Transitioners (i.e., higher initial earnings), transition activity subsequent to graduation leads to increased quarterly wages as transitioning graduates begin to capitalize on their educational credentials.

Table 2 shows the most common transition activities for all May 2001 graduates of Wyoming community colleges from 2001Q2 to 2002Q1. The two main transition activities of graduates, in Rows 1 and 2 of Table 2, account for 31.4 percent of all graduates. Graduates not working during the four-quarter period comprise 21.5 percent of total graduates, with 48.0 percent being nonresidents (122 of 254). In contrast, graduates who worked throughout the four quarters in either Wyoming or an MOU state represent 9.9 percent of total graduates, the majority of whom are Wyoming residents (114 of 117 or 97.4%). Given that these students worked during the quarter of graduation, they are most likely incumbent workers rather than new labor in the state. These individuals have relatively high quarterly earnings compared to those who transitioned at some point during the four-quarter period.

Row 3 shows students who transitioned out of the Wyoming and MOU states’ labor markets in 2001Q2. Of those 86 graduates, 63 (73.3%) were Wyoming residents.

Graduates in Row 4 were probably working during their schooling, and then left their Wyoming or MOU state job upon graduation (7.2%). Most of these students were Wyoming residents (78 of 85 or 88.2%). Of college graduates, 5.1 percent meet the traditional expectation of graduates: to earn a degree, change jobs into steady work, and dramatically increase earnings within a quarter of graduation (see Row 5). Graduates in Row 6 are those who were incumbent workers in 2001Q2, left a job in 2001Q3, and were not working in Wyoming or an MOU state in the following two quarters.

Rows 7 and 8 are similar to graduates in Row 5, but represent longer periods of transition into steady work (2.9% and 2.5%, respectively). Once the transition occurs, they experience fairly substantial gains in earnings. Individuals in this group might benefit from more targeted career services to help them obtain steady work sooner.

Graduates shown in Rows 9 and 10 can be thought of as individuals who encounter difficulty transitioning into steady work. To improve the chances of obtaining steady work more quickly, these individuals might benefit from additional training or targeted career services.

Row 11 shows other transition possibilities not specifically addressed. This group represents 34.3 percent of all graduates.

Selected Findings from Research Using Survey Data

In 2002 Wyoming employers of graduates from Casper College, LCCC, Northwest College, and Sheridan College were surveyed. The majority of graduates who worked in the state in 2001Q2 or 2001Q3 were 24 years of age or younger (385 or 58.4%), female (429 or 65.1%), and worked in the Services (282 or 32.2%) or Retail Trade (221 or 25.3%) industries (see Tables 3, 4, and 5, respectively).

Most graduates who work at least six months for the same employer see increases in wages. Gains in hourly wages for graduates working in 2001Q2 and six months later for the same employer averaged 11.0 percent (see Table 6). Gains for graduates working in 2001Q3 and six months later averaged 3.7 percent.

Employers were asked to report their satisfaction with employee work skills and habits, as well as satisfaction with the supply and skills of labor in general. Table 7 illustrates employer satisfaction with 2001 graduates’ work skills and habits. Overall, 70.7 percent of employers report they are satisfied or very satisfied with employee work skills, while 60.9 percent of employers report they are satisfied or very satisfied with employee work habits. The employers’ satisfaction with the graduates’ work skills and habits is not necessarily indicative of satisfaction with the training the graduates received. Deficiencies in the training may preclude graduates from obtaining jobs in expected occupations.

Table 8 depicts employer satisfaction with the general labor supply. While employers report they are generally satisfied with the graduates they employ, they are less satisfied with the available labor supply and the skills of the available labor supply. More than 20 percent of employers report they are either dissatisfied or very dissatisfied.

Summary

This research increases our understanding of the role Wyoming community colleges play in the workforce development system. Our knowledge of the extent to which community colleges fulfill their role within the workforce development system is still limited. However, R&P’s survey of employers of community college graduates expands that knowledge. By learning how community colleges interact with the labor market, policymakers and others can make informed decisions about education and training in Wyoming. For the complete report, see R&P’s website at <http://doe.state.wy.us/LMI/CollegeReport2003.htm>. Hard copies of the report are also available by contacting R&P at (307) 473-3819.

¹The databases are Wyoming Unemployment Insurance (UI) Wage Records; Wage Records from Colorado, Idaho, South Dakota, and Utah; and student data from Wyoming’s seven community colleges. Wage Records are an administrative database used to calculate UI benefits. By law, each employer who has covered employees must submit tax reports to the state showing each employee’s wage. For more information, see Wyoming Wage Records, 1992-1998 at <http://doe.state.wy.us/LMI/Wage_Records/title.htm>.

²F. E. “Skip” Gillum, et. al, “Workforce Development and Community College Outcomes,” Wyoming Labor Force Trends, July 2001, p. 1; Tom Gallagher, “When Does Training Pay Off? Challenging the Assumptions of the Workforce Investment Act,” Trends, July 2001, p. 1; and Sara Saulcy, “Implementing the Workforce Investment Act: Results from an Employer Survey Follow-up of Casper College Graduates,” Trends, July 2001, p. 10.

³105th Congress, “Workforce Investment Act of 1998,” n.d., <http://www.doleta.gov/usworkforce/asp/act.asp> (May 30, 2001).

⁴Resident status based on state of origin from college data.

⁵Wyoming Department of Employment, Research & Planning, Consumer Report Draft for Casper College, September 19, 2001, p. 11.

⁶Approximately ten percent of jobs are not in Unemployment Insurance (UI) covered employment. Among these are most production agriculture, the self-employed, and railroads. Therefore, it is also possible that graduates may be working in Wyoming or neighboring states, but not in a UI-covered job.

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