Document Type

Dissertation

Degree

Doctor of Philosophy

Major

Adult & Higher Education

Date of Defense

8-3-2011

Graduate Advisor

E. Paulette Isaac-Savage, EdD.

Co-Advisor

Farnsworth, Kent

Committee

Deborah Balser, Ph.D.

Mary Utley

Abstract

A commonly held belief is that formal education has a strong positive association with earnings (Sanchez, 1998). The motivation for individuals to pursue and complete an education beyond high school is likely founded in the hopes of higher paying jobs or a higher position. The “economic benefits” of a community college education can be defined as the gain in personal earnings over time because of the skills and knowledge acquired, as reflected in credit hours completed, at the community college. The purpose of this study was to determine how the skills, knowledge, and credentials obtained in community college occupational courses and the completion of occupational degrees affect employability and future earnings. As a result, a valid source of accountability was produced, providing evidence to stakeholders through the State, community, and institution that the investment in higher education provides a positive rate of return and further validates the important role of the community college. The framework of this study is embedded within the theoretical construct of the human capital theories of education. According to Human Capital Theory, higher education is both, a consumption good and an investment good. As an investment good, individuals sacrifice time and money to receive an education for the purpose of earning a higher salary and having a better standard of living in the future (Becker, 1992). For this project, student databases were obtained through the offices of Institutional Research at two Missouri community colleges. Unemployment wage data from the State of Missouri was accessed for each student through the Department of Economics at the University of Missouri-Columbia. This wage data was adjusted using the Gross Domestic Product Implicit Price Deflator to normalize the data for inflation. Data was analyzed using regression analysis and paired samples t tests. This study provides the first empirical evidence of the labor-market returns to the State of Missouri community college occupational education experience. The increase in earnings was significant for each sub-group of students researched. The methods used in this study cannot establish causality, however, the findings are compelling.

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