An Educational Option For Those Facing Lay- Off: A Human Capital Perspective

This research assesses factors that affect the choice of an educational support severance package when an employee is offered an array of severance packages that also includes a lump-sum buyout and a retirement package. Hypotheses developed from human capital theory were tested using multinomial logistic regression. The sample comprised 446 current and former employees of a large unionized manufacturing firm. This sample is of interest because the jobs held by these individuals, manufacturing jobs with high wages and benefits, are rapidly disappearing. Results indicated that women were more likely to accept the educational option, as were younger and single respondents. Two groups who were not eligible for retirement were of particular interest in this study. Those who accepted the educational option and those who chose the lump-sum payment did not differ on educational attainment or tenure, but differed on age, partnered status, gender and salary.