ADN to BSN: Lessons from Human Capital Theory

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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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