82 Appendix 6: Value per credit hour equivalent and the Mincer function Appendices Next, we map the CHE production of the FY 2021-22 student population to the education ladder. Table 1.2 provides information on the CHE production of students attending SUNY WCC, broken out by educational achievement. In total, students completed 101,177 CHEs during the analysis year, excluding personal enrichment students. We map each of these CHEs to the education ladder depending on the students’ education level and the average number of CHEs they completed during the year. For example, bachelor’s degree graduates are allocated to the stage between the associate degree and the bachelor’s degree, and the average number of CHEs they completed informs the shape of the distribution curve used to spread out their total CHE production within that stage of the progression. The sum product of the CHEs earned at each step within the education ladder and their corresponding value yields the students’ aggregate annual increase in income (∆E), as shown in the following equation: and n is the number of steps in the education ladder, ei is the marginal earnings gain at step i, and hi is the number of CHEs completed at step i. and n is the number of steps in the education ladder, ei is the marginal earnings gain at step i, and hi is the number of CHEs completed at step i. Table A6.1 displays the result for the students’ aggregate annual increase in income (∆E), a total of $13.7 million. By dividing this value by the students’ total production of 101,177 CHEs during the analysis year, we derive an overall value of $135 per CHE. Mincer function The $135 value per CHE in Table A6.1 only tells part of the story, however. Human capital theory holds that earnings levels do not remain constant; rather, they start relatively low and gradually increase as the worker gains more experience. Research also shows that the earnings increment between educated and non-educated workers grows through time. These basic patterns in earnings over time were originally identified by Jacob Mincer, who viewed the lifecycle earnings distribution as a function with the key elements being earnings, years of education, and work experience, with age serving as a proxy for experience.43 While some have criticized Mincer’s earnings function, it 43 See Mincer (1958 and 1974). Table A6.1: Aggregate annual increase in income of students and value per CHE Aggregate annual increase in income $13,692,926 Total credit hour equivalents (CHEs) in FY 2021-22* 101,177 Value per CHE $135 *Excludes the CHE production of personal enrichment students. Source: Lightcast impact model.
RkJQdWJsaXNoZXIy MTM2NjgzMA==