Failing to Finish: The role of employer effects on advanced education attainment

Abstract

This paper investigates how promotion policies impact advanced education attainment on employees throughout a career. Using administrative data from the U.S. Department of Defense (DoD), I leverage a natural experiment where academic credentials were masked from promotion consideration. I exploit an event study and difference-in-differences design to find individuals are 14 percentage points (26 percent relative to the mean) less likely to complete a master’s degree when education credentials are no longer considered for promotion. I then explore possible mechanisms by describing how a graduate degree’s promotion premium fluctuates before and after the policy change. I show attendance at for-profit institutions declined substantially after the policy reform; however, I find the promotion premium of a master’s degree from a for-profit to be similar to other academic institutions.