Workforce Investment Act: Results from an Employer Survey Follow-Up of Casper College
by: Sara Saulcy, Economist
"That employees do not see much in the way of wage increases within six months following graduation is consistent with earlier analysis completed by R&P staff. The research indicates that larger gains in earnings associated with education do not typically appear until approximately 18 months after graduation."
presents results from a survey of employers who hired Casper College graduates.
The previous article "Workforce Development and Community College
Outcomes", provides background information, along with a description of why the
survey was conducted, our techniques, and how we obtained the data. In this article
we discuss summary statistics, as well as potential reasons for the outcomes we
Frequently Used Terms
2000Q2 - second quarter of 2000 (includes months of April, May and June; the quarter of graduation under consideration).
2000Q3 - third quarter of 2000 (includes months of July, August and September).
2000Q4 - fourth quarter of 2000 (includes months of October, November, and December; the first time that second quarter 2000 Unemployment Insurance data are available).
Incumbent worker - an individual who worked prior to attending or graduating from a postsecondary institution of higher education, or who worked while attending school; an individual that does not represent new labor supply.
n - number of item responses.
New employee - an individual not employed at the time of graduation, but who obtained employment within three months of graduation.
Out of labor force - individuals not counted as part of official labor force figures. Although these individuals are not working, they are not counted as unemployed because they are either unwilling, unable, or choose not to seek work.
Survey response - a questionnaire that was returned.
The Population and Employer Responses
Our ability to conduct the survey was dependent on two factors: the availability of student data, and the timing of the download of Unemployment Insurance (UI) Wage Records.1 Once the data were available, student records were matched to employer records by student Social Security Number (SSN) to obtain the information required to conduct the survey. Because the survey was a pilot, and because we wanted to evaluate how the survey might work in practice, we used six months after graduation as a proxy for a Workforce Investment Act (WIA) 2 requirement that employers of graduates be surveyed six months after hiring a training program graduate (see discussion in "Workforce Development and Community College Outcomes: Pilot Survey Process”) for a more complete discussion of data availability issues). Survey responses were generated as shown in Table 1.
Using records that were matched among the Wage Records database, employer records, and student data, R&P surveyed 113 individual employers regarding 145 graduates of Casper College who they had hired. All graduates completed their instructional programs in May 2000. Of those employers, 95 responded (84.1%) with information about 134 Casper College graduates (92.4%).
Because graduates sometimes work for more than one employer, in some instances we received multiple responses for a single graduate. Similarly, several graduates worked for the same employer.
Overall, 158 of the 181 questionnaire forms mailed out to employers were returned, resulting in a response rate of 87.3 percent. Of the 158 responses, five were invalid.3 Government had the highest response rate among major industries, while Retail Trade had the lowest response rate (see Table 2). Note that the Standard Industrial Classification system has ten divisions, but to avoid disclosure of confidential information in our tables, we combined Finance, Insurance, & Real Estate (FIRE) with Services.
For the 153 valid responses, there were some instances when an employer did not respond to certain questions. For example, while there were 31 survey responses for graduates who were employed from the quarter of graduation through January 12, 2001, when asked to report wages, only 26 responded to this item. Where relevant, the number of responses to questions are reported in the text.
Our questionnaire centered on collecting information not available through administrative databases.4 In cases where an employer reported that the graduate was no longer employed by the company, the employer was only required to answer five of ten questions (see "Workforce Development and Community College Outcomes" about the types of questions asked on the questionnaire). Otherwise the employer was asked to complete the entire survey. The Workforce Investment Act5 requires information regarding whether or not employers have been provided with replacement wages or tax credits to employ the graduate. None of the employers responded that the jobs were subsidized.
Industry, Occupation, and Training Program
Graduates identified in UI Wage Records were in ten different industries6 (see Table 2). Employer responses to the questions regarding occupation yielded graduates working in 37 distinct occupations.7 In order to avoid disclosure of confidential information, R&P aggregated Standard Occupational Classification (SOC)8 titles into eight groups. Of the occupations reported, 18 were Registered Nurses, the largest single occupational group in our study (see Figure 1).
Wages, and Hours Normally Worked
The questionnaire asked employers about wages and weekly hours worked by May 2000 Casper College graduates. Four groups of graduates were identified (see Table 1) for whom information about wages were requested:
• Employed in the quarter of graduation (2000Q2) and in
2000Q3, but not working for the same employer six
months after graduation;
• Employed within three months after graduation (2000Q3),
but not employed as of January 12, 2001 by the same
employer (six months after graduation);
• Employed in 2000Q2, 2000Q3, and six months after
graduation by the same employer; and
• Employed within three months after graduation and still
working for the same employer six months later.
The average wage for graduates employed in the quarter of graduation9 (2000Q2) and in 2000Q3, but not working for the same employer as of January 12, 2001 (as per employer response), was $7.78 per hour (n=38). For graduates employed in 2000Q3 but not working for the same employer as of January 12, 2001 (as per employer response), the average wage at hire was $7.57 per hour (n=38).
Employers of graduates still working for them six months after graduation were asked about wages paid to employees as of January 12, 2001. This date was chosen because it is the standard reporting date for Unemployment Insurance for wages paid in the first quarter. The goal was to ease the burden on employers by encouraging them to draw wage information from reports they are already required to submit.
For graduates employed in 2000Q2, 2000Q3, and as of January 12, 2001, the average wage for April, May and June of 2000 was $10.31 (n=29). As of January 12, 2001 (six months after graduation), the average wage for a graduate working for the same employer increased by $1.23 to $11.54 (n=31).
Wages at first hire for graduates employed in 2000Q3 (within 3 months of graduation)
were $11.89 per hour (n=26). The wage increased by 36 cents per hour for graduates
still working for the same employer as of January 12, 2001 to $12.25 per hour (n=26).
Relative to the wages of new employees, incumbent workers’ wages for April, May and June, 2000 and as of January 12, 2001 were lower in comparison to new employees’ wages at hire, and as of January 12, 2001. However, incumbent workers achieved in the six-month period under consideration a substantial gain in wages in comparison to that of new employees. Whereas the range of wage increases was fairly narrow for new employees ($0 to $2.50 per hour), the range of wage increases for incumbent workers was from $0 to $7.27 per hour. This suggests that incumbent workers who obtained additional skills were, in some cases, rewarded with fairly substantial increases in pay. Over the course of a year, an increase of $1.23 per hour (the average hourly wage increase for incumbent workers) would translate to an increase of $2,558.40 annually (assuming a 40-hour work week).10 In contrast, the average 36-cent gain for new workers would yield approximately a $748.80 gain in annual earnings. The increases seen by new employees are probably attributable more to standard incremental increases provided to all employees who stay on with an employer for six months, rather than to education.
For all of the gains that many graduates see, half of all graduates working for the same employer as of January 12, 2001 did not receive any pay increase at all in the six months after graduation. Of new employees, only 32 percent received pay increases. Incumbent workers more frequently received pay increases within six months of graduation, with 66 percent receiving pay increases. The pay increase of 53 percent of incumbent workers receiving increases was less than a dollar per hour.
That graduates do not see much in the way of wage increases within six months following graduation is consistent with earlier analyses completed by R&P staff. The research indicates that larger gains in earnings associated with education do not typically appear until approximately 18 months after graduation.11
Employers reported that their employees worked 34.4 hours per week on average (n = 54). A similar national estimate of hours worked per week was reported by the Bureau of Labor Statistics Current Employment Statistics program, which showed for January 2001 that the average number of hours worked was 34.3.12
Employers were asked about the types of benefits the employee received (see Figure 2). Employees received paid vacation most frequently (69.0%), with paid holidays being the second most frequent benefit (63.8%). Similar results for paid vacation are reported in the recently released employee benefits publication, Employee Benefits in Wyoming: 2000.13
One benefit that we neglected to inquire about was retirement. Despite the omission, we would have expected employers to fill in the gap, as employers were asked to report other benefits not listed on the questionnaire that were received by their employees. None of the employers reported that their employees received retirement benefits as another part of their compensation package.
Consumer satisfaction is also a consideration of WIA. We asked employers about their satisfaction with the employee’s work and work habits. The majority of employers (94%) reported that they were either satisfied or very satisfied with the employee’s work and work habits (n=98) (see Figure 3). Only 6.1 percent report they were less than satisfied. A more in-depth discussion of employer satisfaction will be provided in an upcoming consumer reports publication, which will be available on R&P’s website.
A wide variety of training requirements for occupations were reported. Note that multiple responses for a particular occupation are possible. For instance, many job descriptions indicate that an Associate’s degree as well as work experience in a related occupation is required. Just over half of employers (n = 56) reported the occupation requires licensure or certification, the most frequently occurring response (see Figure 4). This reflects the fact that a large portion of graduates are employed as Registered Nurses, positions that require licensure or certification. On-the-job training was required second most frequently, with about 45 percent of employers reporting this requirement. None of the occupations require a Master’s or professional degree.
A Bachelor’s degree was reported as a level of training required for 30.4 percent of the occupations. Given that Casper College is a two-year institution, this result seems somewhat puzzling. One possible explanation is that for certain types of positions a Bachelor’s degree may serve in place of experience or other training for the occupation. A second possible explanation is that graduates of Casper College may already have the Bachelor’s degree required for the occupation, but chose to acquire additional or more specialized training through the college. That a large portion of occupations require a four-year degree despite Casper College being a two-year institution suggests that many students were incumbent workers, or were individuals out of the labor force with education or experience from elsewhere, rather than new labor supply.
Available Supply of Labor
We asked all employers to comment on whether or not they felt that the available supply of labor was sufficient and skilled for the occupation the graduate was working in (see Figure 5). Out of all employers, only 38 percent of survey respondents commented on the labor supply. Because so few employers responded to the question, the lack of responses suggests that labor supply and skill sufficiency may not be an issue for most employers. For those who responded to the question, R&P used content analysis to code responses to reflect the reported comments. About 48 percent of respondents said they consider the labor supply to be sufficient and skilled. Another 26.2 percent reported there was not enough skilled labor, while another 23 percent said there was not enough labor supply in general. A small number of employers (3.3%) commented that employees were not willing or committed to work.
The results that we achieved from the survey are very encouraging. Given that Casper College has typically received only between 12 and 15 percent of responses from their employer surveys, our employer survey response rate of 87.3 percent represents a vast improvement. The increased response rate largely represents R&P’s unique capacity to accurately identify employer contact information through administrative databases. Acquiring additional survey results from other colleges, including Northwest College in Powell, and Laramie County Community College in Cheyenne, who have recently agreed to work with R&P, will add to the pool of data, and will improve R&P’s ability to broaden the provision of data on graduates of community colleges overall, and to provide more detailed descriptions based on occupation, training programs, and more specific industry data. As more data are collected, trends in the data will be evaluated, providing an even broader understanding of the long-term impacts of educational institutions and other training providers.
1 The UI Wage Records database consists of all employers submitting UI tax records to the Wyoming Department of Employment (DOE), and contains detailed work behavior information on individuals working for employers that are required to pay Unemployment taxes. See Tony Glover, “Enhancing the Quality of Wage Records for Analysis Through Imputation: Part One,” Wyoming Labor Force Trends, April 2001.
2 105th Congress, “Workforce Investment Act of 1998, n.d..
3 Four employers reported they did not have the person on record as an employee. Potential sources of this problem include incomplete or incorrect records on the part of the employer, lack of knowledge of the employee by the person filling out the questionnaire, unwillingness of the employer to participate in the survey, or incomplete or incorrect UI Wage Records. A fifth response was invalid because the employer reported once that the employee had worked for them, but then responded a second time that they had no record of the employee. The first questionnaire sent to the employer was received after response deadlines had passed. A second survey was sent to the employer to encourage a response. A comparison of the two surveys for the same employer and graduate yielded the conflicting responses. Consequently responses for the employer for the particular graduate were entered as missing.
4 Administrative databases include Unemployment Insurance (Wage Records, Claimants, Covered Employment & Wages), driver’s license data, Employment Services data, higher education databases, etc.
5 See Endnote 2.
6 Finance, Insurance, & Real Estate (FIRE) and Services are combined to avoid disclosure of confidential information.
7 Employers were requested to report the occupation title and primary activities of the employee only if the person was still employed by them as of January 12, 2001.
8 U.S. Office of Management and Budget, Standard Occupational Classification Manual, 2000.
9 Graduates are employed as identified in Unemployment Insurance Wage Records.
10 The Alien Labor Certification program assumes a 40-hour work week to convert hourly wages to annual wages. See General Administration Letter No. 4-95, n.d. for further discussion.
11 Wyoming Dept. of Employment, Research & Planning, Consumer Report Draft For Casper College, Sept. 19, 2000, p. 11.
12 Bureau of Labor Statistics, “B-8. Average Weekly Hours of Production or Nonsupervisory Workers on Private Nonfarm Payroll by Major Industry and Manufacturing Group, Seasonally Adjusted,” Establishment Data Hours Seasonally Adjusted, ftp://ftp.bls.gov/pub/special.requests/ee/ceseeb8.txt (May 21, 2001).
13 Wyoming Department of Employment, Research & Planning, Employee Benefits in Wyoming: 2000.
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