Why Do Employers Pay for College?

45 Pages Posted: 19 Sep 2002 Last revised: 29 Oct 2010

See all articles by Peter Cappelli

Peter Cappelli

University of Pennsylvania Wharton School - Center for Human Resources; National Bureau of Economic Research (NBER); University of Pennsylvania - Management Department

Date Written: September 2002

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

Cappelli, Peter, Why Do Employers Pay for College? (September 2002). NBER Working Paper No. w9225. Available at SSRN: https://ssrn.com/abstract=332269

Peter Cappelli (Contact Author)

University of Pennsylvania Wharton School - Center for Human Resources ( email )

3733 Spruce Street, Vance Hall
Philadelphia, PA 19104-6358
United States

HOME PAGE: http://www.wharton.upenn.edu/faculty/cappelli.html

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States

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