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Underinvestment In Employer Training: Is A Mandate To Spend On Training The Answer?, John H. Bishop Oct 2009

Underinvestment In Employer Training: Is A Mandate To Spend On Training The Answer?, John H. Bishop

John H Bishop

American employers and their workers under invest in employer training. Under investment occurs because training generates externalities, because the tax system is biased against training investments, and because most workers are unable to finance general training because they lack access to loans to finance consumption during periods of heavy investment in training. School based occupational training ameliorates the under investment problem somewhat but it is not a complete answer to the problem. The French approach of requiring firms to spend at least 1.4 percent of their wage bill on continuing training of employees (if they are to avoid paying a …


Signaling The Competencies Of High School Students To Employers, John H. Bishop Oct 2009

Signaling The Competencies Of High School Students To Employers, John H. Bishop

John H Bishop

[Excerpt] The fundamental cause of the low effort level of American students, parents, and voters in school elections is the absence of good signals of effort and accomplishment and the consequent lack of rewards for learning. In most other advanced countries mastery of the curriculum is assessed by examinations that are set and graded at the national or regional level. Grades on these exams signal the student's achievement to employers and colleges and influence the jobs that graduates get and the universities and programs to which they are admitted. Exam results also influence school reputations and in some countries the …


Achievement, Test Scores And Relative Wages, John H. Bishop Oct 2009

Achievement, Test Scores And Relative Wages, John H. Bishop

John H Bishop

[Excerpt] This article examines the causal connections between these two phenomena: changes in the academic achievement of high school graduates and changes in the payoff to college. Four specific questions are addressed. The questions and the answers generated by our examination of the data are outlined below[...]


Toward More Valid Evaluations Of Training Programs Serving The Disadvantaged, John H. Bishop Oct 2009

Toward More Valid Evaluations Of Training Programs Serving The Disadvantaged, John H. Bishop

John H Bishop

The paper challenges the widespread assumption that the wage effects of federal training programs are reliable and unbiased estimates of productivity effects and social benefits. Evidence is presented that the reputations of government training programs are unreliable and that employers stigmatize those eligible for TJTC and CETA OJT contracts. Graduates of classroom training programs which are known to be funded by JTP A are likely to be similarly stigmatized. TJTC eligibles are seriously underpaid by employers and JTPA graduates may experience a similar fate. Consequently, the true effects of JTP A on the productivity of disadvantaged workers may be considerably …


Vocational Education For At-Risk Youth: How Can It Be Made More Effective?, John H. Bishop Oct 2009

Vocational Education For At-Risk Youth: How Can It Be Made More Effective?, John H. Bishop

John H Bishop

[Excerpt] Minority youth and non-minority youth from economically disadvantaged backgrounds have great difficulty finding steady jobs that provide real training and advancement opportunities. In October 1986, only 32 percent of black youth who had recently dropped out of high school had a job and only 42 percent of the previous June's graduates not attending college had a job. For Hispanics, only 46 percent of recent drop outs had a job and only 65 percent of graduates not attending college had a job. While the employment rates among white youth were higher (47 percent for drop outs and 71 percent for …


Is It Wise To Try To Force Employers To Pay All The Costs Of Training At The Workplace?, John H. Bishop Oct 2009

Is It Wise To Try To Force Employers To Pay All The Costs Of Training At The Workplace?, John H. Bishop

John H Bishop

[Excerpt] This article explores the effects that these regulations have on: (a) the form of labor contracts and on training outcomes such as: (b) who pays for work place training of non-exempt employees, (c) whether training is obtained at schools or firms, (d) how much training non-exempt employees get? The evidence on who gets and who pays for training is consistent with the proposition that these regulations are having the effects that economists would predict for them. Many other explanations fit the data just as well, however, so causal connections between these regulations and training outcomes cannot be proved beyond …


Are National Exit Examinations Important For Educational Efficiency?, John H. Bishop Oct 2009

Are National Exit Examinations Important For Educational Efficiency?, John H. Bishop

John H Bishop

“This paper analyses effects of national or provincial exit examinations on education quality. On theoretical grounds, the paper argues that such examinations should increase high school achievement, particularly in examination subjects, and that teachers and students and parents and school administrators should focus more on academic achievement when making school-quality decisions. On the negative side, exit examinations may lead to a tendency to concentrate on learning facts, rather than understanding contexts.”


Department Of Labor Testing: Seizing An Opportunity To Increase The Competitiveness Of American Industry And To Raise The Earnings Of American Workers, John H. Bishop Oct 2009

Department Of Labor Testing: Seizing An Opportunity To Increase The Competitiveness Of American Industry And To Raise The Earnings Of American Workers, John H. Bishop

John H Bishop

[Excerpt] The professionalism that the American military recently exhibited in the Persian Gulf is in no small part due to care with which it selects, assigns and trains its soldiers. The military's success in preparing this highly skilled workforce was made possible by decades of research into occupational competency assessment, aptitude test development and validity research. The Department of Labor is also a world leader in the development and validation of employment aptitude tests and there is now an opportunity for this expertise to be implemented in ways that can enhance the nations's competitiveness and improve the standard of living …


Job Performance, Turnover And Wage Growth, John H. Bishop Oct 2009

Job Performance, Turnover And Wage Growth, John H. Bishop

John H Bishop

The paper tests and finds strong support for the hypothesis that in the nonunion sector of the economy, turnover is negatively selective on a worker's job performance. At establishments with about 17 employees, a worker who is one standard deviation (21 percent) less productive than average during the first few months on the job is 11 percentage points more likely to be laid off or fired and 7 percentage points more likely to quit during the succeeding year. At large nonunion establishments and in small labor markets, productivity has very large effects on risks of an involuntary separation but almost …


Why California Needs A High School Exit Examination System: Enrollment + Motivation + Engagement => Learning , John H. Bishop Oct 2009

Why California Needs A High School Exit Examination System: Enrollment + Motivation + Engagement => Learning , John H. Bishop

John H Bishop

[Excerpt] The purpose of the educational enterprise is LEARNING. Engagement is essential to achieving this purpose. Students must come to school, pay attention, do homework, engage with the subject and construct their new knowledge in ways that allow them to retrieve it later. How are students induced to do all this hard work? Teachers try to make their subject interesting, but sixty–one percent of American students, nevertheless, say they “often feel bored” (OECD 2002 p. 330). Studies of time use in classrooms have found that American students actively engage in a learning activity for only about half the time they …


The Incidence Of And Payoff To Employer Training: A Review Of The Literature With Recommendations For Policy, John H. Bishop Oct 2009

The Incidence Of And Payoff To Employer Training: A Review Of The Literature With Recommendations For Policy, John H. Bishop

John H Bishop

[Excerpt] The theory of on-the-job training predicts that workers should pay the full costs of training that is useful at other firms. In fact, however, workers receiving training are not paid less than other similar workers and new hires who require extra training are paid only slightly less than new hires who require less than average amounts of training. Many employers offer workers the opportunity to learn general skills such as word processing and other computer applications programs on company time. Studies of the costs and benefits of apprenticeship training programs find that employers do not recoup their investment during …


Employer Training And Skill Shortages: A Review Of The State Of Knowledge With Recommendations For Future Research By The Department Of Labor, John H. Bishop Oct 2009

Employer Training And Skill Shortages: A Review Of The State Of Knowledge With Recommendations For Future Research By The Department Of Labor, John H. Bishop

John H Bishop

"This report proposes that the Department of Labor undertake a program of research designed to inform the policy debate related to skill shortages and the role of employer training in ameliorating them. The paper reviews the currently available evidence and then proposes new research on seven questions."


Does The Targeted Jobs Tax Credit Create Jobs At Subsidized Firms?, John H. Bishop, Mark Montgomery Oct 2009

Does The Targeted Jobs Tax Credit Create Jobs At Subsidized Firms?, John H. Bishop, Mark Montgomery

John H Bishop

This paper uses the results of a survey of more than 3500 private employers to determine whether use of the Targeted Jobs Tax Credit (TJTC) alters the level of a fIrm's employment and/or whom the fInn hires. We estimate that each subsidized hire generates between .13 and .3 new jobs at a participating fIrm. Use of the program also appears to induce employers to hire more young workers (age 25 and under). Our results suggest, however, that at least 70% of the tax credits granted employers are payments for workers who would have been hired even without the subsidy. Such …


The Motivation Problem In American High Schools, John H. Bishop Oct 2009

The Motivation Problem In American High Schools, John H. Bishop

John H Bishop

American high school students devote much less time and energy to their studies than the students of other nations. The cause of the lack of motivation is the lack of rewards for studying hard and for taking rigorous courses. This occurs for four reasons. First, the u.S. economy fails to give academic achievement its due reward in the labor market and rewards instead credentials that signify time spent, rather than competencies acquired. In most other countries credentials are more closely related to competencies obtained, so school achievement is a more important determinants of prestige and income as an adult than …


What's Wrong With American Secondary Schools: Can State And Federal Governments Fix It?, John H. Bishop Oct 2009

What's Wrong With American Secondary Schools: Can State And Federal Governments Fix It?, John H. Bishop

John H Bishop

[Excerpt] The poor performance of American students is sometimes blamed on the nation's "diversity". Many affluent parents apparently believe that their children are doing acceptably by international standards. This is not the case. In Stevenson, Lee and Stigler's (1986) study of 5th grade math achievement, the best of the 20 classrooms sampled in Minneapolis was outstripped by every single classroom studied in Sendai, Japan and by 19 of the 20 classrooms studied in Taipeh, Taiwan. The nation's top high school students rank far behind much less elite samples of students in other countries. In mathematics the gap between Japanese and …


Productivy Growth And Tenure: A Test Of On-The-Job Training Theories Of Wage And Productivy Growth, John H. Bishop, Stan Stephenson Oct 2009

Productivy Growth And Tenure: A Test Of On-The-Job Training Theories Of Wage And Productivy Growth, John H. Bishop, Stan Stephenson

John H Bishop

[Excerpt] Studies have found consistently that there is a strong positive correlation between a worker's tenure with a firm and that individual's wage rate. Becker's (1975) on-the-job training (OJT) model is the most widely accepted explanation for this association. The OJT model posits that new employees receive training early in their tenure, which raises their productivity both in and outside the firm. Competition forces the employer to pay employees who have completed this training at least as much as they are worth outside the firm less transfer costs. Jobs that offer such training are more attractive than jobs that do …


Why Are Wage Profiles So Flat During The First Year On A Job?, John H. Bishop, Suk Kang Oct 2009

Why Are Wage Profiles So Flat During The First Year On A Job?, John H. Bishop, Suk Kang

John H Bishop

This paper presents evidence that productivity net of general training costs rise 4 or 5 times more rapidly than wage rates during the first 2 years on a job. This occurs for three reasons. First, sorting, high job search costs and the reputational damages that result from premature separations cause workers to prefer front loaded compensation packages which reduce the likelihood of involuntary terminations. Second, due to progressive income taxation and poor access to credit, workers discount the future more heavily than employers. Front-loading compensation is, therefore, a relatively cheap way for employers to attract top quality new hires. Finally, …


Scientific Illiteracy: Causes, Costs And Cures, John H. Bishop Oct 2009

Scientific Illiteracy: Causes, Costs And Cures, John H. Bishop

John H Bishop

[Excerpt] This article examines the causes of the learning deficits in science, math and technology, evaluates their social costs and then recommends policy measures for remedying the problems identified. Following the American Association for the Advancement of Science's Science for All Americans report, I define the domain of "science" very broadly to include mathematics and technology along with the natural sciences. To avoid confusing readers accustomed to the narrower definition of science, broadly defined science is referred to as science, mathematics and technology.


The French Mandate To Spend On Training: A Model For The United States?, John H. Bishop Oct 2009

The French Mandate To Spend On Training: A Model For The United States?, John H. Bishop

John H Bishop

American employers and workers underinvest in employer training. Underinvestment occurs because training generates externalities, because turnover is excessive, because the tax system discourages training investment, and because workers lack access to loans that would allow them finance heavy investments in training (Bishop 1991). During the election campaign, President Clinton proposed stimulating training by requiring employers to spend some minimum percentage of their wage bill on training or else be subject to a special tax. France has had such a mandate since 1972, so the design of an American training mandate is likely to benefit from a careful examination of the …


Why Students Don't Study: How You Can Make Studying Pay Off For Them, John H. Bishop Oct 2009

Why Students Don't Study: How You Can Make Studying Pay Off For Them, John H. Bishop

John H Bishop

American high school students devote much less time and energy to their studies than the students of other nations. The cause of the lack of motivation is the lack of rewards for studying hard and for taking rigorous courses. This occurs for four reasons. First, the U.S. economy fails to give academic achievement its due reward in the labor market and rewards instead credentials that signify time spent, rather than competencies acquired. In most other countries credentials are more closely related to competencies obtained, so competencies acquired rather than just time spent are a more important determinant of prestige and …


Employment Testing And Incentives To Learn, John H. Bishop Oct 2009

Employment Testing And Incentives To Learn, John H. Bishop

John H Bishop

Employment tests predict job performance because they measure or are correlated with a large set of malleable developed abilities which are causally related to productivity. Our economy currently under-rewards the achievements that are measured by these tests. Consequently, economic incentives to study hard in high school are minimal and this absence of incentives has contributed to the low levels of achievement in math and science. The paper concludes with a discussion of ways in which employment tests can strengthen incentives to learn.


In Search Of A Niche, John H. Bishop Oct 2009

In Search Of A Niche, John H. Bishop

John H Bishop

"As enrollment in secondary vocational education programs declines and employers re-evaluate the attributes needed for success in today’s job market, some observers of the U.S. education system have called for schools to limit – or even eliminate – the teaching of occupational skills. Does this mean employers don’t reward such training?"


The Federal Role In Education Reform, John H. Bishop Oct 2009

The Federal Role In Education Reform, John H. Bishop

John H Bishop

[Excerpt] The analysis of the causes of the American apathy regarding teaching and learning has important implications for the curriculum. Many of the weaknesses of math and science curricula--the constant review and repetition of old material, the slow pace and minimal expectations--are adaptations to the low level of effort most students are willing to devote to these subjects. When considering proposed revisions of the curriculum, one must remember that motivating students to take tough courses and to study hard must be a central concern.


Vocational And Academic Education In High School: Complements Or Substitutes, Suk Kang, John H. Bishop Oct 2009

Vocational And Academic Education In High School: Complements Or Substitutes, Suk Kang, John H. Bishop

John H Bishop

[Excerpt] A number of blue ribbon-panels have called for increases in the number academic courses required for graduation from high school and for lengthening the school day and the school year. Most states have adopted the first of these recommendations but not the second. With the amount of time a student spends in school remaining constant, increases in the number of required academic courses force reductions elsewhere. Which activities should be reduced? Should the reduction be made in study halls, music and fine arts,physical education, and life skills courses or should it come in vocational education? The answer to this …


Do Empoyers Share The Costs And Benefits Of General Training?, John H, Bishop Oct 2009

Do Empoyers Share The Costs And Benefits Of General Training?, John H, Bishop

John H Bishop

This paper presents evidence that during the first year or so of a worker's tenure, wages rise more slowly than productivity net of training costs when training is predominantly general and that many employers are, in effect, induced to share the costs and benefits of general on-the-job training with their employees. This occurs for three reasons. First, sorting, high job search costs and the reputational damages that result from premature separations make a dismissed worker's next best alternative decidedly unattractive and this causes workers to prefer front loaded compensation packages which reduce the likelihood of involuntary terminations. Second, since most …


Improving Education: How Large Are The Benefits? How Can It Be Done Efficiently? , John H. Bishop Oct 2009

Improving Education: How Large Are The Benefits? How Can It Be Done Efficiently? , John H. Bishop

John H Bishop

[Excerpt] The Problem: The National Assessment of Educational Progress (NAEP) reports that 92 percent of high school seniors cannot "integrate specialized scientific information" and do not have "the capacity to apply mathematical operations in a variety of problem settings." (NAEP 1988a p. 51, 1988b p. 42) According to the 1992 National Adult Literacy Survey, only 23 percent of adults are able to reliably determine correct change using information from a menu (National Center for Education Statistics, 1994 Table 1.3).


Overeducation, John H. Bishop Oct 2009

Overeducation, John H. Bishop

John H Bishop

According to manpower requirements economists, "overeducation" occurs when an individual has more schooling than is "required" by their job. Studies have found that men (but not women) who exceed the schooling norm for their job by 4 or more years are more dissatisfied with their current job and more likely to look for a better one, but that they are not more likely to be politically alienated or to support left wing causes. Individuals whose schooling achievement (competence in reading and math) exceeds the norm for their job are significantly more productive than coworkers. This implies that a greater supply …


Do Some Employers Share The Costs And Benefits Of General Training?, John H. Bishop, Suk Kang Oct 2009

Do Some Employers Share The Costs And Benefits Of General Training?, John H. Bishop, Suk Kang

John H Bishop

[Excerpt] One of the central propositions of the human capital theory of on-the-job training is that workers pay all the costs and receive all the benefits of general training (see Ehrenberg and Smith 1996, Filer, Hammermesh and Rees 1996, Borjas 1996, Kaufman 1986). Since general training raises a worker's ability to be productive in other organizations as well as the one providing the training, the training firm must pay a wage commensurate with the trained worker's new higher level of productivity if they are to prevent the loss of their trained workers. Since the workers, not the firm, get the …


The Worsening Shortage Of College Graduate Workers, John H. Bishop, Shani Carter Oct 2009

The Worsening Shortage Of College Graduate Workers, John H. Bishop, Shani Carter

John H Bishop

The Bureau of Labor Statistics projections of occupational employment growth have consistently underpredicted the growth of skilled occupations. BLS currently projects that professional, technical and managerial jobs will account for 44.5 percent of employment growth between 1988 and 2000, while we project they will account for 70 percent of employment growth. Between March 1988 and March 1991 these occupations, in fact, accounted for 87 percent of employment growth. The BLS's projections of the supply/demand balance for college graduates have also been off the mark--predicting a surplus in the 19808 when in fact relative wage ratios for college graduates were rising …


A Signaling/Bonding Model Of Employer Finance Of General Training, John H. Bishop, Suk Kang Oct 2009

A Signaling/Bonding Model Of Employer Finance Of General Training, John H. Bishop, Suk Kang

John H Bishop

[Excerpt] This paper challenges the general validity of these simple predictions. It begins in section 2 by presenting empirical evidence that (1) trainees often do not have to accept lower wage jobs in order to obtain training and (2) that employers often appear to be sharing the costs of general training with employees. In section 3 we expand and generalize Hashimoto's elegant theory of the sharing of the costs and benefits of specific training and show why with our modifications firms choose to offer front loaded compensation packages in which they appear to share the costs of general training with …