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Why Do Employers Pay For College?

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  • Peter Cappelli

Abstract

Employers routinely provide financial support for their employees who pursue post-secondary education despite the fact that it represents perhaps the classic example of a general skill' that costs the employer money and raises the market wages of employees who possess it. The analysis below examines why employers provide such support, and the results suggest that employees do not pay for tuition assistance through below market or training wages, the typical arrangement for funding general skills training. Instead, tuition assistance appears to select better quality employees who stay on the job longer, at least in part to keep making use of that benefit.

Suggested Citation

  • Peter Cappelli, 2002. "Why Do Employers Pay For College?," NBER Working Papers 9225, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:9225
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    Cited by:

    1. Bhaskar, V & Holden, Steinar, 2002. "Wage Differentiation via Subsidised General Training," Economics Discussion Papers 8851, University of Essex, Department of Economics.
    2. Sylvain, Serginio, 2014. "Does Human Capital Risk Explain The Value Premium Puzzle?," MPRA Paper 54551, University Library of Munich, Germany.
    3. Edward P. Lazear, 2009. "Firm-Specific Human Capital: A Skill-Weights Approach," Journal of Political Economy, University of Chicago Press, vol. 117(5), pages 914-940, October.
    4. Siegfried, John & Getz, Malcolm, 2006. "Where do the children of professors attend college?," Economics of Education Review, Elsevier, vol. 25(2), pages 201-210, April.
    5. Boom, Anette, 2005. "Firms' investments in general training and the skilled labour market," Labour Economics, Elsevier, vol. 12(6), pages 781-805, December.

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    More about this item

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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