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Author: Frazis, Harley Jay
Resulting in 7 citations.
1. Frazis, Harley Jay
Diploma Effect
Ph.D. Dissertation, University of Wisconsin - Madison, 1988. DAI-A 49/12, p. 3825, Jun 1989
Cohort(s): Young Men
Publisher: UMI - University Microfilms, Bell and Howell Information and Learning
Keyword(s): Bayesian; College Education; College Graduates; Earnings; Educational Attainment; Educational Returns; Panel Study of Income Dynamics (PSID)

This dissertation deals with the college diploma effect on earnings. A "diploma effect"--a particularly large return to completing the final year of college compared to earlier years of college--has been found in some studies but not in others. The major part of the dissertation examines the existence of the diploma effect. Most of the analysis is performed using the Panel Study of Income Dynamics (PSID) and the NLS of Young Men. OLS analysis of earnings reveals that neither the addition of IQ, allowance for different time paths of earnings for different educational levels, or interaction of schooling with other characteristics accounts for the diploma effect. To correct for selection bias, a model of choice of level of educational attainment and earnings is developed. The results of correcting for selection bias indicate that selection bias does not account for the diploma effect in either data set. A sensitivity analysis (performed using a Bayesian technique developed by Leamer) shows that the results are not sensitive to the exclusion of family background variables from the earnings equation. Estimated diploma effects are not consistently statistically significant in the NLS or in the PSID. Increasing the sample size by combining the NLS or the PSID with the 1970 Census--treating IQ and selection bias correction terms as missing observations in the Census--the estimated diploma effects greatly increase in magnitude, and the effects are consistently statistically significant. The final part of the thesis examines explanations of the diploma effect. A version of the Spence screening model where family background variables affecting the cost of schooling are observable to both the employer and the analyst implies that selection bias correction should account for the diploma effect. A version where family background variables observable to the analyst are not observable to the employer is not supported by the data. A model is developed where workers signal that they know the degree is expected by obtaining the degree. If such knowledge is correlated with productivity, and under certain conditions, an earnings differential for the diploma above that reflecting the acquisition of human capital can be sustained as one of multiple equilibria. [UMI ADG89-03016]
Bibliography Citation
Frazis, Harley Jay. Diploma Effect. Ph.D. Dissertation, University of Wisconsin - Madison, 1988. DAI-A 49/12, p. 3825, Jun 1989.
2. Frazis, Harley Jay
Herz, Diane E.
Horrigan, Michael W.
Employer-provided Training: Results from a New Survey
Monthly Labor Review 118,5 (May 1995): 3-17.
Also: http://stats.bls.gov/opub/mlr/1995/05/art1exc.htm
Cohort(s): NLSY79
Publisher: U.S. Department of Labor
Keyword(s): Current Population Survey (CPS) / CPS-Fertility Supplement; High School Completion/Graduates; Panel Study of Income Dynamics (PSID); Survey of Income and Program Participation (SIPP); Training, Occupational; Training, On-the-Job; Wage Gap

In recent years, there has been a growing interest in the role that training-especially job skills training-plays in the economy. Concerns over the competitiveness of U.S. labor in the globalized economy, the weak performance of labor productivity since 1973, and the widening gap between the earnings of high school graduates and the college educated workers are among the reasons cited to support increasing the training provided the U.S. work force. As researchers attempt to examine the potential impact of training on the economy, and as lawmakers wrestle with the question of the appropriate role of public policy, a growing need has arisen for more and better data on both the nature and the extent of private-sector training. To be sure, a rich array of data on the training received by individuals is provided by various household surveys, such as the Current Population Survey, the National Longitudinal Survey of Youth, the Survey of Income and Program Participation, and the Panel Study of Income Dynamics. In contrast to this information, however, data on the nature and extent of training opportunities provided by private businesses are scarce. Indeed, a comprehensive data base containing such information simply does not exist. Despite the gap, academic researchers have been innovative in their use of the limited data that do exist. Some researchers have adopted a case study approach, others have used the information on training that can be found in existing Federal surveys, and still others have conducted their own surveys. Still, given the concerns over the competitiveness and relative productivity of U.S. industries, it is important that improved information on the nature of employer-provided training be collected.
Bibliography Citation
Frazis, Harley Jay, Diane E. Herz and Michael W. Horrigan. "Employer-provided Training: Results from a New Survey." Monthly Labor Review 118,5 (May 1995): 3-17.
3. Frazis, Harley Jay
Loewenstein, Mark A.
NTIS Reexamining the Returns to Training: Functional Form, Magnitude, and Interpretation
Report: BLS Working Paper No. 367. Washington DC: Bureau of Labor Statistics, U.S. Department of Labor, 2003.
Also: http://www.bls.gov/osmr/abstract/ec/ec030040.htm
Cohort(s): NLSY79
Publisher: U.S. Department of Labor
Keyword(s): Labor Market Outcomes; Training; Training, Occupational

This paper estimates the wage returns to training, paying careful attention to the choice of functional form. Both the National Longitudinal Survey of Youth (NLSY) and Employer Opportunity Pilot Project (EOPP) datasets indicate that the return to an extra hour of formal training diminishes sharply with the amount of training received. A cube root specification fits the data best, but the log specification also does well. The linear and quadratic specifications substantially understate the effect of training.

Also: NTIS Report: PB2006101302

Bibliography Citation
Frazis, Harley Jay and Mark A. Loewenstein. "NTIS Reexamining the Returns to Training: Functional Form, Magnitude, and Interpretation." Report: BLS Working Paper No. 367. Washington DC: Bureau of Labor Statistics, U.S. Department of Labor, 2003.
4. Frazis, Harley Jay
Loewenstein, Mark A.
On-the-Job Training
Hanover, MA: Now Publishers Inc, 2007.
Also: http://www.nowpublishers.com/product.aspx?product=MIC&doi=0700000008
Cohort(s): NLSY79
Publisher: Now Publishers Inc.
Keyword(s): Human Capital; Job Productivity; Job Turnover; Labor Economics; Skilled Workers; Training, On-the-Job

Permission to reprint the abstract has not been received from the publisher.

Originally published as Foundations and Trends® in Microeconomics Volume 2 Issue 5. DOI: 10.1561/0700000008

On-the-Job Training surveys the recent literature from both a theoretical and empirical perspective. The analysis of how individuals obtain and are paid for their skills is fundamental to labor economics. The basic idea of human capital theory is that workers and firms invest in workers' skills in order to increase their productivity, much as persons invest in financial or physical assets to earn income. Workers develop many skills through formal education not tied to an employer, but an important part of their skills are learned on the job. On-the-Job Training focuses on recent literature including empirical research using direct measures of training and theoretical papers inspired by findings from this empirical work. The authors presents a theoretical model showing that costs and returns to general human capital may be shared if training increases mobility costs, if there are constraints on lowering wages, or if there is uncertainty about the value of training at competing employers. This model analyzes the choice of the amount of training, emphasizing the influence of whether the employer can commit to training prior to employment. In addition, the model implies that firms will attempt to match low-turnover workers with training opportunities, which is supported by the empirical literature.

Bibliography Citation
Frazis, Harley Jay and Mark A. Loewenstein. On-the-Job Training. Hanover, MA: Now Publishers Inc, 2007..
5. Frazis, Harley Jay
Loewenstein, Mark A.
Reexamining the Returns to Training: Functional Form, Magnitude, and Interpretation
BLS Working Paper No. 325, Bureau of Labor Statistics, U.S. Department of Labor, 1999.
Also: http://stats.bls.gov/oreec/ec990060.htm
Cohort(s): NLSY79
Publisher: U.S. Department of Labor
Keyword(s): Employer Opportunity Pilot Project (EOPP); Heterogeneity; Training; Wage Dynamics

This paper examines the appropriate functional form and the size of the wage returns to training. In both the National Longitudinal Survey of Youth (NLSY) and Employer Opportunity Pilot Project (EOPP) datasets a log specification fits best. In the NLSY, the full effect of training occurs with a lag as long as two years, training on previous jobs is a substitute for training on the current job, and the return to training declines with labor market experience. The EOPP data indicate that formal and informal training are perfect substitutes; however, an hour of formal training has a much greater effect on wages than does an hour of informal training. We find very large returns to formal training in both the NLSY and EOPP. The mixed continuous-discrete nature of the training variable means that measurement error can cause estimates of the effects of short spells of training to be biased upward, but we demonstrate that the maximum upward bias in estimated returns at the geometric mean is minimal. Heterogeneity in returns is a more plausible explanation of the high estimated return to training; in the EOPP data, the return to training is significantly higher in more complex jobs. With unobserved heterogeneity in returns, our estimates can be regarded as the return to training for the trained, but cannot be extrapolated to the untrained.
Bibliography Citation
Frazis, Harley Jay and Mark A. Loewenstein. "Reexamining the Returns to Training: Functional Form, Magnitude, and Interpretation." BLS Working Paper No. 325, Bureau of Labor Statistics, U.S. Department of Labor, 1999.
6. Frazis, Harley Jay
Loewenstein, Mark A.
Reexamining the Returns to Training: Functional Form, Magnitude, and Interpretation
Journal of Human Resources 40,2 (Spring 2005): 453-476.
Also: http://www.jstor.org/stable/4129533
Cohort(s): NLSY79
Publisher: University of Wisconsin Press
Keyword(s): Heterogeneity; Training; Training, On-the-Job; Wage Equations; Wage Growth; Wages

We investigate the functional form for formal training in a wage equation and derive estimates of its rate of return. The cube root fits best in our two data sets. We show that if wages are not adjusted continuously, estimating the return to training requires one lag and one lead of training. Using the cube root and a semi-nonparametric estimator, estimated returns are 150-180 percent. Adjusting for heterogeneity in wage growth, promotions, and direct costs reduces the return to 40-50 percent. We find evidence of heterogeneity in returns. Our estimates can thus be regarded as the return to training for the trained, but cannot be extrapolated to the untrained.
Bibliography Citation
Frazis, Harley Jay and Mark A. Loewenstein. "Reexamining the Returns to Training: Functional Form, Magnitude, and Interpretation." Journal of Human Resources 40,2 (Spring 2005): 453-476.
7. Frazis, Harley Jay
Spletzer, James R.
Worker Training: What We've Learned from the NLSY79
Monthly Labor Review 128,2 (February 2005): 48-58.
Also: http://www.bls.gov/opub/mlr/2005/02/art7exc.htm
Cohort(s): NLSY79
Publisher: U.S. Department of Labor
Keyword(s): Bureau of Labor Statistics; Human Capital Theory; Longitudinal Surveys; Training, Employee

The 1979 cohort of the National Longitudinal Survey of Youth has been a wellspring of knowledge about worker training and a valuable means of empirically testing human-capital theory.

How individuals obtain their skills and how they are paid for the use of those skills are concepts that are fundamental to the field of labor economics. Productive skills are often referred to as "human capital." The basic idea of human-capital theory is that workers invest in their own skills in order to earn higher wages, much as persons invest in financial or physical assets to earn income. Although this idea goes back at least to Adam Smith, modern human-capital research was originated in the late 1950s by economists Theodore Schultz, Jacob Mincer, and Gary Becker. Their ideas, focusing on investments in and returns to education and training, have provided the theoretical and empirical basis for decades of ensuing research.

Much of the empirical research on the topic of human capital has analyzed the relationship between education and wages. This focus on education is due to the abundance of high-quality data sources with information on both education and wages. For example, analysts using cross-sectional data from the Current Population Survey (CPS) have found that individuals in the United States receive earnings that are approximately 10 percent higher for every additional year of schooling they have completed. Kenneth I. Wolpin's article on education in this special edition of the Monthly Labor Review shows that, over the 15-year period between ages 25 and 39, a male college graduate earns 80 percent more than a male high school graduate without any college, and a male high school graduate earns 57 percent more than a high school dropout.

However, empirical research on training—the other key component of human capital--has lagged research on the economics of education. The human-capital model yields straightforward predictions about the relations hip of on-the-job training to wages, wage growth, and job mobility; still, as will become clear, testing these predictions requires good longitudinal microdata.

Bibliography Citation
Frazis, Harley Jay and James R. Spletzer. "Worker Training: What We've Learned from the NLSY79." Monthly Labor Review 128,2 (February 2005): 48-58.