ADN to BSN: Lessons from Human Capital Theory


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Abstract

Executive SummaryDespite the recommendation by the National Advisory Council on Nurse Education and Practice to increase the percent of baccalaureate (BSN) prepared nurses in the workforce to at least two-thirds by 2010, 37% of the workforce and 60% of new grads were associates-degree (ADN) prepared as of 2000.Using the Human Capital Theory, a model was created to evaluate if increases in earnings achieved by ADNs when they earned a higher degree outweighed the cost of their education.ADNs who earn their BSN do, in fact, earn a significant annual wage premium.However, after projecting net lifetime earnings and an internal rate of return (IRR), the model revealed that for more than half of the ADN-to-BSN graduates, the costs of education were greater than the salary increase.Younger nurses were more likely to experience a positive IRR due to the longer term of the investment, and were nearly four times as likely to pursue an advanced degree with a positive expected IRR.Employers who encourage BSN completion early in the career trajectory and provide tuition support will be better able to demonstrate a positive rate of return and influence the choice to pursue higher education.

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