Postschool education and training: Accessible to all?

P O S T S C H O O L E D U C A T I O N AND T R A I N I N G :

A C C E S S I B L E TO A L L ?

Arvil V. Adams, Stephen L. Mangum, and Philip W. Wirtz

This article examines knowledge and skill development during early adulthood when the individual has severed ties with formal education and entered the world of work. Focusing on a cohort of young men from the National Longitudinal Surveys, the paper examines the economic and social forces influencing participation in various forms of postschool education and training. A recursive model is used to explore skill development patterns over the lifecycle. Attention is focused on the role of early human capital development and its influence on the cost and incentives for subsequent skill development in the adult working years. The findings point to the cumulative nature of skill development over the lifecycle with some important implications for efforts to reduce economic and social inequalities for blacks and whites.

Knowledge and skill development is a lifelong process that takes place in a variety of forms and institutional settings. This development typically begins in the home during early childhood and continues within the formal education system through early adulthood. Beyond, the process continues for many adults in other institutional settings such as private industry, government, armed forces, proprietary schools, community or- ganizations, and trade unions? Data from the Survey of Participation in Adult Education suggests that some 40 million people participated in postschool occupational training in the United States in 1978 at an estimated total annual expenditure of $27 million--an amount equal to nearly 8% of U.S. gross domestic investment in that year and about 19% of all public and private school expenditure.

Researchers in studying skill development have focused on the formal education system, with less attention given to this development process

Adams, Mangum, and Wirtz 69

beyond formal education. 2 The many diverse institutions involved in knowledge and skill development beyond formal education have naturally contributed to a diffusion of interests in this process. Collectively, however, the potential effect of these institutions and this process on individuals and society is no less important than that of formal education in the allocation of economic and social opportunities.

In previous work we have examined how participation in postschool occupational training affects economic well-being. 3 Our findings of significant gross returns to several forms of postschool occupational training have been consistent with previous research in this area. 4 This article takes the question one step further and examines the issue of individual access to institutions of postschool training, exploring the economic and social forces influencing skill development during early adulthood. The motivation behind questions of access to postschool occupational training is clear. In 1984, 83% of whites 18 to 24 years of age were high school graduates and 28% of whites in this age group were enrolled in college. In contrast, the same year, 74.7% of blacks and 60.1% of Hispanics 18 to 24 years of age were high school graduates and 20.4% and 7.9%, respectively, were enrolled in college. 5 Blacks received 6.5% of all bachelors degrees, 5.8% of all masters degrees, 3.9% of all Ph.D.s, and 4.1% of all professional degrees awarded in 1981, while comprising 12% of the U.S. population. According to the High School and Beyond sample of 1980 high school seniors, 40% of the blacks in the sample had never attended any postse- condary education or training institution as of 1982, in comparison to 34% of whites. 6

This article is concerned with why some individuals participate in postschool training opportunities while others do not. 7 The inquiry is focused on the option value of early schooling and its relation to subsequent patterns of skill development. 8 Stated briefly, does the amount of early schooling influence individual access to skill development beyond formal education and are those who fail to acquire skills through formal schooling discouraged from pursuing skill development opportunities as adults?

The responses to these questions are important to a broad range of education and labor market policies. Of particular interest today is the role and effectiveness of the private sector in occupational training in- asmuch as programs historically sponsored by the federal government are being moved toward increased private-sector involvement on the basis of budgetary and philosophical considerations. This changing orientation has been clearly demonstrated in the leglisative move from CETA (Com-

70 The Review of Black Political Economy/Winter 1987

prehensive Employment Training Act) to JTPA (Job Training Partnership Act). This transition has sparked concern over differences in service popu- lations between the two programs and whether JTPA is merely a fore- shadowing of future federal abandonment of training efforts and an increase in problems of minority access to skill development opportunities. 9

In this article the decision to participate in postschool occupational training during early adulthood is approached from an economic perspective. This decision is expressed as a function of the personal, family, school, and community background characteristics expected to influence the value of occupational skill development as an investment good for the individual, the so-called human capital perspective. L~ The influence of these characteristics is examined within a recursive model. The model explores the relation of these characteristics to early patterns of skill development and examines the effect of these patterns on subsequent participation in postschool training during early adulthood. The model is estimated using data from the National Longitudinal Surveys. The findings point to the cumulative nature of skill development over the lifecycle with those participating in this development early in the lifecycle more likely to participate at later stages. These findings raise important questions about the ability of training efforts centered in the private sector to ameliorate racial inequalities.

The original National Longitudinal Surveys, which provide the primary data for this article, constitute a longitudinal study of the labor market experiences of four U.S. population cohorts: men 45 to 56 years of age, women 30 to 45 years of age, and young men and young women 14 to 24 years of age. H For each of these cohorts a national probability sample of the noninstitutionalized civilian population was drawn by the Bureau of the Census. This paper is based on data collected from the cohort of young men. These young men were initially interviewed in 1966 when 14 to 24 years of age. This analysis is restricted to young men who were out of school during the period from 1974 to 1976 and who responded to questions about their participation in postschool occupational training during this period. ~2 As such, all members of the sample had a minimum of three years in which to participate in postschool training.

In the following section a model of lifecycle knowledge and skill development is presented and operationalized. The model is estimated and the findings reviewed in the third section. Some concluding observations are offered in the final section.


LIFECYCLE PATTERNS OF KNOWLEDGE AND SKILL DEVELOPMENT

Within the human capital framework, the individual's participation in skill development beyond compulsory schooling is linked to the value of this development as an investment good. The individual is expected to participate in additional knowledge and skill development where the rate of return to this activity exceeds that for alternative uses of the individual's resources. In exploring why some individuals participate and others do not, it is useful to consider the economic and social forces influencing the rate of return to such training. This influence may be reflected in either the cost of producing additional knowledge and skills or the stream of benefits attached thereto. 13

In describing this framework, Mincer cites an uncertain relationship between early patterns of skill development and those later in the lifecycle. On the one hand, he argues, the stock of skills present in the individual increases the cost (lowers the rate of return) of producing additional skills through the medium of higher foregone earning. On the other hand, the stock may decrease the cost (increase the rate of return) by enhancing the individual's proficiency at producing additional skills? 4 Should these forces offset one another, early patterns of skill development may be neutral with respect to their influence on subsequent skill development. 15 The nature of this relationship is an empirical issue.

The model below, expressed in general form, traces the accumulation of knowledge and skills over the lifecycle and the economic and social forces contributing thereto. It explores the relationship, described by Mincer, between early skill development and that later in the lifecycle. The individual is viewed as engaging in lifecycle planning but as being able to reevaluate his/her plans in response to the outcomes of early skill development activities. It initially examines a number of personal, family, school, and community background characteristics for their influence on formal educational attainment. The influence of these characteristics on participation in early postschool training is then examined along with the option value of formal education. The influence of these characteristics on participation in training at a later stage of the lifecycle is then examined together with the option value of formal education and that of early postschool occupational training.16

ED ~ f(PER, FAM, SCH, COMM) EPST ~--- g(ED, PER, FAM, SCH, COMM)

(l) (2)


SPST -~- h(EPST, ED, PER, FAM, SCH, COMM)

where

ED = Formal educational attainment EPST = Early participation in postschool training sPsT = Subsequent participation in postschool training PER = A vector of personal background characteristics FAM = A vector of family background characteristics SCH = A vector of school characteristics. COMM = A vector of community characteristics.

(3)

EARLY SKILL DEVELOPMENT

The first equation in the model focuses on early skill development through formal schooling. The dependent variable is the years of formal schooling completed. The vector of personal characteristics expected to influence early skill development includes the individual's IQ and age. IQ should be correlated with the individual's ability to produce additional knowledge and skills and age serves as a control for differences in time available for participation in skill development.

In the vector of family background characteristics, socioeconomic status proxies the influence of early skill development opportunities in the home and the ability to finance additional development beyond the home environment. The individual's "taste" for education, moreover, may be related to this measure. The number of siblings is also included. The presence of additional children is expected to influence the amount of parental time available for home-based skill development as well as the family's ability to finance subsequent development.

The vector of schooling characteristics in this first equation includes measures of school quality and curriculum. The quality of schooling available, proxied here by average per pupil expenditures, is expected to influence the individual's ability to benefit from additional knowledge and skill development. Participation in an academic curriculum may reflect both a taste and an ability for producing additional skills. The size and urban/rural character of the community where early skill development takes place may also limit the options available for and means to benefit from additional development. Growing up in a small rural community or a large urban ghetto, for example, may produce few incentives or means to acquire additional skills, This too may be reflected in the individual's formal educational attainment.


EARLY POSTSCHOOL EDUCATION AND TRAINING

Once the individual leaves the formal education system and enters the world of work, participation in postschool training in its many forms and institutional settings becomes possible. The second equation of the recursive model examines early participation by the individual in this form of skill development. The dependent variable is dichotomous, classifying the individual as a participant or a nonparticipant in early postschool training. No distinction is made of the occupational type, institutional source, or duration of this participation, simply whether the individual has participated or not.

The influence of individual background characteristics on the likelihood of participation in early postschool training is examined. The set of characteristics included is identical to that used earlier, with two excep- tions. First, the community characteristics measure is updated to the individual's current place of residence to reflect the influence of community surroundings on the options available for and means to benefit from additional investment in skill development. Second, the vector of personal characteristics is extended to include the stock of early human capital development, represented by the individual's formal educational attainment. This provides a direct test of formal education's net influence on subsequent skill development and a measure of its option value.

SUBSEQUENT POSTSCHOOL EDUCATION AND TRAINING

As the individual ages, opportunities for additional skill development arise. The third equation examines the relation of early skill development patterns to the individual's participation in subsequent postschool training opportunities. The dependent variable is the same as that used in the second equation, but measured at a later stage of the lifecycle. Five new variables are added to the vector of personal characteristics.

The financial responsibilities of a family are expected to increase the young male adult's incentive to participate in occupational skill development. For this reason, the individual's marital status and number of dependents are added to the model. Also included is a measure of the individual's perception of personal control over life's events. Individuals who perceive themselves to be in control of these events are considered more likely to draw a cause-effect relationship between participation in postschool training and the subsequent stream of benefits related to this activity.


TABLE 1 Percentage Distributions and Means of

Variables Used in Recursive Model

Whites Blacks

I. Independent Variables

Average annual per pupil expenditures by school district

Less than $500* 22.4 15.7 $500 to 640 27.3 21.3 $651 or more 24.1 6.3 NA 26.2 56.7

High school curriculum Vocational/corn mereial 12.9 13.4 Academic 37.9 15.0 General* 42.2 52.2 NA 7.0 19.4

Socioeconomic status a I0.6 8.2

Number of siblings 0-1* 30.0 12.6 2-4 53.0 36.6 5+ 17.0 50.8

I.Q. in quintiles Highest 20.7 l. 4 Second 19.6 5.0 Third 16.9 5.8 Fourth 13.5 7.8 Lowest* 7.6 19.7 NA 21.7 60.3

Educational attainment College graduate or more 27.4 9.2 Some college 21.7 15.5 High school graduate 37.9 36.7 Less than high school* 13.0 38.6

Age b 18.7 18.7

Rotter score e 22.4 24.9

Marital status Single* 23.8 31.0 Married/spouse present 70.3 57.7 Separated/divorced 5.9 11.3

Number of dependents excluding wife 0* 48.0 34.9 I-2 40.3 41.9 3 or more ll.7 23.2


T A B L E 1 (con t inued)

Whites Blacks

Years of t enure on cur ren t job Less than one* 26.5 20.0

1 14.9 12.0 2--4 31.7 35.7 5+ 26.9 32.3

Res idence at age 14 Large ci ty 20.4 25.1 Other c i ty /suburb 22.9 14.8 Town 29.0 21.5 Rural* 27.7 38.6

Cur ren t res idence Nonsouth met ro 53.4 32.3 Nonsouth nonmetro 18.3 .6 South met ro 18.4 36.1 South nonmet ro* 9.9 31.0

II. Dependent var iable

Years of school comple ted 13.4 11.6 Early par t ic ipat ion in postsehool educat ion and training 62.3 45.7 Subsequent par t ic ipat ion in postsehool educat ion and training 47.0 32.9

Number of respondents 1,923 506

*Omi t t ed ca tegory in regression analysis .

aThis index of family socioeconomic background includes: fatherts educat ional a t t a i nme n t , occupat ional s t a tu s of the fa ther or head of household, mother ' s educat ional a t t a inmen t , educat ional a t t a i n m e n t of rcspondent ' s oldest older sibling, and a measure of the availabil i ty of reading mate r i a l s in the home when the respondent was 14. These i t ems were s tandardized and combined in linear fashion to produce an index with a mean of 10.0 and a s tandard deviat ion of 3.0. The index is fur ther described in the NLS Codebook Supplement - -Appendix 10.

bAge of respondent a t da te of initial interview in 1966.

CThis score is based on answers to a ser ies of ques t ions asked each NLS respondent about his percept ion of the relat ionship be tween rewards and individual behavior. Developed by J.B. Rot ter , the quest ions are designed to ident ify individuals who perceive themse lves able to e f f ec t posit ive ou tcomes through their individual act ions. The lower the score the more the individual perce ives h imsel f able to e f f ec t posit ive ou tcomes through individual ac t ions such as postsehool educat ion and training. For a fur ther descript ion of the measure see J.B. Robber, J.E. Chance, and E.J. Phares, Applications o f a Social Learning Theory of Personal i ty , New York: Holt, Rinehart , Winston, 1972.


Participation in early postschool training is also added to the vector of personal characteristics along with a measure of tenure on current job. Both represent additions to the individual's stock of knowledge and skills at an earlier stage of the lifecycle and provide another test of the influence of this stock on the incentive to participate in additional skill development. Tenure on current job is a surrogate for informal skill development on the job. The expected effect on subsequent postschool training, however, depends on whether this development acts as a complement or a substitute for formal sources of knowledge and skill development. These variables are described in Table 1. To preserve information in estimating the model NA categories were created where responses were missing for a particular variable.

Sixty-two percent of the white males participated in postschool training prior to 1974 and 47% participated between 1974 and 1976. For black males these percentages were 46 and 33%, respectively. The data reveal significant racial differences in the type of training received. These differences are consistent whether looking at early or subsequent participation in postschool training. Referring to the more recent time period, over 40% of the whites who participated in training received training in the professional and technical occupational fields, 16% in managerial occupa- tions, and 23% in the skilled manual trades. In contrast, only 20% of black participants received professional or technical training, 8% participated in managerial training, and nearly 50% received training in the skilled manual trades. While 12% of the white participants received training from business and technical schools and 25% were trained at junior, community, or four-year colleges, only 3% of black participants received training at business/technical schools and 32% were trained at area vocational schools or community colleges. Approximately one third of the participants of both races received employer provided training. For blacks, company training was the major source of clerical training, while for whites business/technical schools were the major provider. While company training programs were the major providers of skilled manual training for both races, whites were more likely than blacks to participate in appren- ticeships and blacks were more concentrated in skilled manual trades training provided by area vocational schools.

ESTIMATION OF THE MODEL

The model is estimated separately for white and black males using ordinary least squares, t7 The results of the estimation strongly confirm


TABLE 2 Regressions Relating Years of School to Selected Respondent

Characteristics by Race (Standard Errors)

Whites Blacks

SCHOOL CHARACTERISTICS

Average annual per pupil expenditures by school district

$500 to 650 -0.1053 (.1146) $651 or more 0.0316 (.1180) NA -0.0682 (.1357)

High sehool eurrieulum Voeational/com mercia1 Aeademie NA

-0.0161 (.2743) -0.4309 (.3857) -0.3848 (.2779)

-0.4015.* (.1278) -0.3596 (.2495) 1.2262"**(.1024) 1.4253"**(.2773)

-1.7637"** (.1774) -2.7050*** (.2368)

FAMILY BACKGROUND CHARACTERISTICS

0.0402*** (.0024) Soeioeeonomie status

Number of siblings 2-4 -0.2130" (.0929) 5+ -0.4656*** (.1294)

PERSONAL CHARACTERISTICS

I.Q. in quintiles Highest 1.9067"** (. 1812) Second 1.4738"** (. 1754) Third 0.8074*** (. 1766) Fourth 0.3884* (.1821) NA 0.6042** (. 1847)

Age 0.0428*** (.0130)

COMMUNITY CHARACTERISTICS

ResJdenee at age 14 Large eity 0.1627 (.1217) Other city/suburb 0.0057 (.1174) Town -0.0020 (.1106)

0.0421"** (0.0049)

-0.2212 (.2679) -0.5015 (.2710)

1.6814" (.7803) 0.6109 (.4377) 0.7857* (.3831) 0.1335 (.3402) 0.2139 (.2538)

-0.0684** (.0258)

-0.9374*** (.2503) -0.4380 (.2667) -0.4967* (.2193)

R 2 (eorreeted) .515

Degrees of freedom ] , 905

***p< .001 **p_< .01

*p_< .05

.548

488


the cumulative nature of skill development over the lifecycle. Early patterns of skill development are found to be closely related to subsequent participation in postschool training. Those who acquire skills early in the lifecycle are more likely to acquire additional skills at a later stage of the lifecycle.

The influence of individual background characteristics on early skill development for whites and blacks is substantial, accounting for roughly half the variation in formal educational attainment (Table 2) I.Q. as a measure of the ability to produce additional knowledge and skills plays an important role. Young whites in the highest I.Q. quintile average 1.9 years of additional schooling when compared with young whites in the lowest quintile. The difference for blacks, 1.7 years, is smaller and has more variation around the expected value. As documented in a wide body of literature, growing up in a family with low socioeconomic status is found to adversely affect formal educational attainment. The measured effect is nearly identical for whites and blacks. The size of the family, however, appears to be important only for whites.

The amount of dollars expended per pupil by a school district bears no measurable relationship to the individual's years of schooling completed. This simple proxy for school quality may fail to capture the more complex relationship between educational resources and outcomes. Such a relationship is found in the case of curriculum tracking. Whites in an academic curr iculum average 1.2 additional years of schooling when compared to those in a general curriculum. For blacks the difference is 1.4 additional years. The difference may be even larger when compared with those in a vocational curriculum. The importance of this is increased when one considers that other forces such as socioeconomic status and I.Q., expected to influence curriculum tracking, have been held constant. Beyond, community surroundings are found to have little measurable influence on schooling, except for young blacks who grew up in a large city. For many young blacks, this doubtless reflects the negative influence of an urban ghetto on educational attainment.

The influence of these background characteristics on early participation in postschool training flows largely from their effect on formal educational attainment (Table 3). For blacks, skill development through formal schooling is closely related to participation in postschool training. This pattern is not evident among whites, however. Young blacks with 12 years of schooling are 28 percentage points more likely to participate in early postschool training than are young blacks with less than 12 years of


TABLE 3 Regressions Relating the Likelihood of Participation

in Early Postschool Education and Training to Selected Respondent Characteristics by Race

(Standard Errors)

Whites Blacks

SCHOOL CHARACTERISTICS

Average annual per pupil expenditures by school district

$500 to 650 -0.0450 (.0299) $651 or more -0.0178 (.0314) NA -0.1090"* (.0355)

High school curriculum Vocational/co m met eial 0.0559 (.0336) Academic -0.0522 (.0283) NA -0.1024" (.0486)

FAMILY BACKGROUND CHARACTERISTICS

Soeioeeonomie status Number of siblings

2-4 5+

PERSONAL CHARACTERISTICS

I.Q. in quintiles Highest Second Third Fourth NA

Educational attainment

0.0012 (.0007)

-0.0315 (.0242) -0.0963** (.0336)

0.0560 (.0490) 0.1344"* (.0473) 0.1340"* (.0471) 0.0430 (.0480) 0.0697 (.0487)

College graduate or more -0.0342 (.0472) Some college -0.0078 (.0448) High school graduate 0.0622 (.0381)

Age 0.0374*** (.0035) COMMUNITY CHARACTERISTICS

Current residence Nonsouth metro 0.1259" * * (. 0382 ) Nonsouth nonmetro 0.0945* (.0424) South metro 0.0713 (.0419)

0.0028 0.0056 0.1114

0.1505" -0.0325 -0.0335

-0.0002

-0.0098 -0.0323

0.4589* 0.2903*

-0.1166 0.0592

-0.0100

0.3941"** 0.3333*** 0.2817"** 0.0013

-0.0008 0.3546 0.0604

(.0720) (.1o48) (.o746)

(.0677) (0.767) (.o669)

(.0013)

(.0721) (.0720)

(.2070) (.1196) (.1032) (.0904) (.0690)

(.0992) (.0749) (.0550) (.0069)

(.0606) (.2741) (.0570)

R 2 (corrected) .109

Degrees of freedom I, 902

***p < .001 **p ~';01

*p~.05

.120

485


schooling. This difference increases to 39 percentage points for young blacks with four or more years of college completed.

Why there is such a large racial gap in the importance of educational attainment as a factor apparently influencing participation in postschool training is a fundamental question raised by these results and one deserv- ing of additional study. While a definitive answer is not possible to this question at this time, the evidence is consistent with the perception of access to postschool training for whites independent of their level of attainment in formal schooling, in contrast to educational attainment serv- ing as a screening or sorting device for blacks relative to participation in postschool training. Whether such a "screen," if it in fact exists, is the product of individual choice or the result of institutionalized social or economic forces is beyond the purview of the data set analyzed here.

The cumulative nature of skill development over the lifecycle is evident when the stock of knowledge and skills is expanded for blacks and whites to include participation in early postschool training as a descriptor of subsequent participation (Table 4). For young white males with four or more years of college and earlier participation in postschool training, the likelihood of participating in subsequent postschool training is 41 percentage points greater than that for young white males with less than 12 years of schooling and no earlier participation in postschool training. The difference for blacks is 43 percentage points.

The stock of human capital one possesses, based on these results, is directly related to subsequent participation in skill development. Al- though the combined effect is much the same for blacks and whites, educational attainment in the formal schooling setting appears a more important predictor of future participation for blacks than for whites. This highlights the importance of formal schooling in general and the problems faced by blacks in particular related to their preschool background characteristics and early schooling experiences. Disparities in these background characteristics for blacks vis-a-vis whites play an important role in skill development over the lifecycle through their influence on formal schooling and participation in postschool training. Many blacks begin with a skill disadvantage linked to these background characteristics that widens over the lifecycle in a cumulative fashion.

For blacks and whites, informal skill development on the job, measured by tenure on current job, appears to exert little influence on subsequent participation in postschool training. This informal source of additional human capital appears to be neutral in its influence on subsequent skill development in formal settings. These results collectively confirm the


TABLE 4 Regressions Relating the Likelihood of Participation in Subsequent Postschool Education and Training to

Selected Respondent Characteristics by Race (Standard Errors)

Whites Blacks

SCHOOL CHARACTERISTICS Average annual per pupil expenditures by school district

$500 to 650 -0. 1239"** -0.2100"* (.0311) (.0663)

$651 or more -0.0670* -0.0893 (. 0326 ) (. 0968)

NA -0.0174 -0.0612 (.0368) (.0690)

High school curriculum Vocational/Corn mereial 0.0210 0.0985

(.0349) (.0636) Academic -0.0458 0.1718

(.0294) (.0705) NA -0.0758 -0. 1141

(.0506) (.0619) FAMILY BACKGROUND CH A RA CTERISTICS

Socioeconomic status O. 0017" 0.0009 (.0007) (.0013)

Number of siblings 2-4 -0. 0657" * -0. 0773

(.0252) (.0665) 5+ -0.0525 -0.0525

(.0350) ( .066]) PERSONAL CHARACTER~TICS

I.Q. in quintiles Highest 0.0785 0.2351

(.0508) (. 1917) Second 0.0355 -0. 1731

(. 0491) (. zlo5) Third 0.0201 0.0217

(.0489) (.0960) Fourth 0.0167 O .0336

(.0497) (.0836) NA -0.0268 0. 1284"

(.0506) (.0636)

Educational attainment College graduate + 0.2203* * * 0.3499"* *

(.0499) (.0952)


TABLE 4 (continued)

Whites Blacks

Some college 0.1717"** 0.1037 (.0468) (.0722)

High school graduate 0.0580 0.1091" (.0397) (.0526)

Early postsehool education and training 0.1928"** 0.0852*

(.0240) (.0420) Years of tenure on current job

1 0.0133 0.0418 (.0353) (.0710)

2-4 -0.0098 0.0528 (.0290) (.0541)

5+ 0.0196 0.0203 (.0312) (.0562)

Age -0.0099* -0.0079 (.0042) (.0068)

Rotter score 0.0007 -0.0077 (.0021) (.0037)

FAMILY CHARACTERISTICS Marital status

Married with spouse present 0.0429 0.1061

(.0313) (.0544) Divorced or separated -0.0396 0.1275

(.0517) (.0725) Number of dependents excluding wife

1-2 0.0272 -0.0336 (.0287) (,0532)

3+ -0.0460 -0.0672 (.0424) (.0649)

COMMUNITY CHARACTERISTICS Current residence

Nonsouth metro 0.0814" 0.0369 (.0398) (.0561)

Nonsouth nonmetro 0.0694 0.0848 (.0440) (.2532)

South metro 0.1074" 0.1373"* (.0435) (.0526)

R 2 (corrected)

Degrees of freedom

***p__< .001 **p_< .01

*p<__ .05

.103 .174

1,893 476


option value of early skill development. Those acquiring skills early in the lifecycle in formal settings are more likely to have access to and incentives for additional knowledge and skill development at later stages of the lifecycle. It is important that these results are obtained even when other background characteristics are held constant.

These results, combined with research on the economic returns to investment in postschool training, suggest the issue of racial differences in patterns of postschool training also involves questions of racial differences in participation by institutional provider of training and occupational area of training. Of fundamental importance is an understanding of forces producing these patterns. Racial differences in how educational attainment early in the lifecycle impacts upon particiption in postschool training appears to be one such force. Identification of other forces and greater understanding of the reasons behind and processes by which such factors exercise influence are areas for further investigation.

CONCLUDING OBSERVATIONS

This article has focused attention on knowledge and skill development during early adulthood when the individual has severed ties with formal education and entered the world of work. Knowledge and skill development at this and later stages of the lifecycle, occurring in a variety of forms and institutional settings, has typically received less attention than that at earlier stages within the formal education system. As such, much less is known about the institutions and the process of skill development during the adult working years. The emphasis among policymakers on formal education during youth overlooks the potential contribution of skill development at later stages of the lifecycle to the nation's economic growth and social welfare.

After completing formal education, most individuals spend 40 to 50 years in the workforce. The ability to adjust to economic and tech- nological changes over this period determines not only the economic well- being of the individual, but that of the nation through its influence on productivity growth and economic development. Skill development early in the lifecycle through formal education is expected to influence this ability to respond to disequilibria, but further skill development at later stages of the lifecycle can also be expected to exert an important influence on this ability.

By focusing on a cohort of young men, representing the first wave of the postwar baby-boom population, this article has examined the process of


skill development in the early working years. It has examined in a market setting the economic and social forces influencing participation in occupational skill development. Individuals are assumed to choose the amount in knowledge and skills they wish to produce based on the economic value of these skills. The findings confirm the option value of early skill development. Those who acquire skills early in the lifecycle continue to acquire them at later stages.

More importantly, these findings suggest that if left to operate freely, the market for knowledge and skill development during the adult working years may promote and reinforce economic and social inequalities present at earlier stages of the lifecycle. The relative economic and social disadvantage faced by many blacks has been linked in this article to their underinvestment in knowledge and skills early in the lifecycle and the widening of this gap at later stages of skill development. The nature of this relationship has immediate and important implications for efforts to reduce inequalities in the labor market for low income groups, and par- ticularly, minorities.

These findings support the importance of policies to offset these disad- vantages and encourage early skill development. Keeping young people in school is important, but for those who withdraw, providing alternative skill development opportunities may promise long run payoffs by preserv- ing the individual's access to and incentives for participation in subsequent skill development opportunities. This research suggests that individuals who do not excel in the formal school setting because they fail or are failed by the system are less likely to participate in further skill development. For those who pass through this stage of the lifecycle without building a foundation of skills, a "second chance" education system is desirable to assure that these individuals can acquire additional skills later in the lifecycle if they so desire. The evidence presented here and the literature on recent federal employment and training policy trends, as symbolized by the transition from CETA to JTPA, suggest concern that the private training market may not permit remedial education and training--the second chance--without stronger government intervention. In such cases, the failure to provide these opportunities promises to preserve and extend inequalities of the past.

NOTES

This research is part of a larger study of postschool education and training funded by the U.S. Department of Labor, Employment and Training Administration, under grant #21-1-81-01. The authors alone are responsible for the contents of this article.


1. These institutions and adult participants are described in Bryan S. Fraser, "The Structure of Adult Learning, Education and Training Opportunity in the United States" (Washington, D.C.: National Institute for Work and Learning, 1980) and Pa- tricia Cross, Adults as Learners (San Francisco: Jossey-Bass, 1981).

2. This conclusion is found in Mark Blaug, "Human Capital Theory: A Slightly Jaundiced Survey," Journal of Economic Literature, vol. 14, no. 3, September 1976, p. 832 and also in Mary Jane Bowman, "Out of School Formation of Human Re- sources," D.M. Windham (ed.), Economic Dimensions of Education, (Washington, D.C.,: National Academy of Education, 1979), p. 141.

3.Arvil V. Adams and Stephen L. Mangum, "Post-School Occupational Training and the Private Sector," Thirty-Seventh Annual Proceedings of the Industrial Relations Research Association, December 1984.

4. See, for example, Richard Freeman, "Occupational Training in Proprietary Schools and Technical Institutes," Review of Economics and Statistics, vol. 56, August 1974.

5. U.S. Department of Commerce, Bureau of the Census, Current Population Re- ports, School Enrollment--Social and Economic Characteristics of Students: October 1984, Series P-20, #404, November 1985.

6. National Center for Education Statistics, The Condition of Education (Wash- ington, D.C.: U.S. Government Printing Office, 1985), p. 122.

7. The participation examined is that offered in a formal institutional setting for the purposes of developing occupational skills. The paper does not attempt to explain skill development in informal settings, including that on the job, which doubtless accounts for a substantial amount of knowledge and skill development beyond formal schooling. See Jacob Mincer, School, Experience and Earnings (New York: Columbia Univer- sity Press, 1974), pp. 7-23; and Sherwin Rosen, "Learning and Experience in the Labor Market," Journal of Human Resources, vol. 7, 1972, pp,. 342-362.

8. As explained in Burton Weisbrod, "Education and Investment in Human Cap- ital," Journal of Political Economy, vol. 52, supplement, October 1962, pp. 109-113. The option value of early schooling derives from the opportunities for additional education and training created by the initial schooling experience.

9. For exposure to some of the issues surrounding JTPA, such as that of"creaming" see, Gary Walker et al., "An Independent Sector Assessment of the Job Training Part- nership Act" (New York: Grinker, Walker and Associates, January, 1985); John M. Jeffries and Howard Stanback, "Employment and Training Policy for Black America: Beyond Placebo to Progressive Public Policy," Review of Black Political Economy, Fall 1984; and James Bovard, "Son of CETA," New Republic, April 14, 1986.

10. This perspective is developed in Gary Becker, Human Capital, (New York: Co- lumbia University Press, 1975), pp. 71-80 and Jacob Mincer, "The Distribution of Labor Incomes: A Survey with Special Reference to the Human Capital Approach," Journal of Economic Literature, Vol. 13, No., March 1970, pp. 6-21. An assessment of this perspective is found in Sherwin Rosen, "Human Capital: A Survey of Empirical Research," in R.G. Ehrenberg (ed.), Research in Labor Economics, vol. I (Greenwich, Conn.: JAI Press, 1977).

11. These cohorts are described in The National Longitudinal Surveys" Handbook (Columbus, Ohio: Center for Human Resource Research, 1981).

12. Respondents were asked in each survey about their participation in formal occupational training since the previous survey. Those responding in the affirmative were asked about the occupational type, institutional source, and duration of the training experience. Some institutional sources of this training included business colleges, technical institutes, company training programs, correspondence courses, high schools (including night schools), area vocational schools, community and four-year


colleges, the armed forces, apprenticeship programs and various community agencies such as churches and YMCAs.

13. The cost of producing additional knowledge and skills is determined by the opportunity cost of the resources used in producing these skills and the manner in which they are combined in the human capital production function.

14. Mincer (1970, p. II, note 7 above). From an institutional perspective, early knowledge and skill development may influence the acquisition of job search skills making individuals more aware of the training opportunities at their disposal. As such, early education and training may be linked to increased aspirations and knowledge of the world of work. In addition, early skill development may provide the credentials necessary to gain access to subsequent training. Through this development, individuals are able to differentiate themselves from others and filter through screening devices imposed to limit the size of applicant queues.

15. This is presented in the human capital literature as the "neutrality hypothesis:' See Bowman (1979, pp. 150-15 I, note 2 above). The limited evidence available views human capital as enhancing the incentive to acquire additional knowledge and skills. See Arvil V. Adams, "The Stock of Human Capital and Differences in Post-School Formal Occupational Training for Middle-Aged Men," Southern Economic JoUrnal, vol. 44, April, 1978, pp. 929-936 and Charles B. Knapp, "Education and Differences in Postschool Human Investment," Economic Inquiry, Vol. 15, 2, 1977, pp. 283-289. For a different view, however, see Yoram Ben-Porath, "The Production of Human Capital Over Time," in W.L. Hansen (ed.), Education. Income and Human Capital (New York: National Bureau of Economic Research, 1970), pp. 129-147.

16. This construction of the model in recursive form permits one to trace the paths by which early background characteristics influence knowledge and skill development over the lifecycle. The influence of these characteristics on early patterns of knowledge and skill development and the relation of these patterns to those at later stages of the lifecycle can be explored in this framework. The properties of recursive models are more fully described in J. Johnston, Econometric Methods (New York: McGraw-Hill, 1972).

17. As is customary with recursive models, the residuals of each equation are assumed to be independent of one another allowing estimation with ordinary least squares. Probit estimates of the second and third equations with their dichotomous dependent variables are consistent with and very similar to those presented here based on ordinary least squares. The reader is warned that ordinary least squares with dummy dependent variables implies that standard tests of significance do not apply since the error term is no longer normally distributed.

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