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correlations with turnover could have an influence after con- The variable "Public" takes the value 1 for public providers
trolling for some other variable. Therefore, most of the vari- and 0 for contract providers. In both models, the variables
ables in Table 5-2 are included in the regression analysis. other than starting wage are significant with less than 95%
One variable that was excluded was the training completion confidence but are nearly significant and can be included on
rate. Although completion rate is correlated with turnover, the basis of strong theoretical justification and the small sample
examination of the data suggests that a high completion rate size. No other combination of these three variables results in a
may be as much a result of low turnover as a cause. Many of model with significant or even nearly significant coefficients.
the systems with high completion rates had very small num- Both models use 57 valid cases.
bers of trainees, which would be expected with low rates of The two models demonstrate that there is a strong connec-
turnover. As a hypothesis, a low turnover rate results in the tion between wages and turnover, with higher wages connect-
provider needing to recruit only a few new operators, which ing with lower turnover. The equations imply that an increase
means that the provider can be very selective, which would of $1.00 in wages corresponds, on average, to a drop of 3.5%
tend to produce a high training completion rate. (Model 1) to 5.1% (Model 2) in turnover rate. Although, the
The regression analysis found that only the same three R Squared values show that, even in combination with other
variables in Table 5-1 (excluding completion rate) con- variables, wages only account for 20% to 21% of the variation
tributed significantly to any model of turnover rate. Two in turnover rates. In addition, the models show that (1) by
models of interest are the following: controlling wages, public providers have turnover rates that
are 10% lower than private providers on average and (2) lower
Model 1 percentages of part-time operators are connected with lower
Turnover = 0.685 - (0.035 × Starting Wage) turnover rates. A difference of 10% in the percentage of part-
- (0.101 × Public) time operators corresponds, on average, with a difference of
(t statistic) (-2.11) (-1.77) 2.4% in turnover rate.
(significance) (0.040) (0.083)
R Squared = 0.21
Graphical Analysis and Discussion
Model 2
Starting Wage, Provider Type, and Turnover
Turnover = 0.864 - (0.051 × Starting Wage)
- (0.244 × Percent Part-Time) Figure 5-1 shows in graphical form the relationship repre-
(t statistic) (-3.44) (-1.71) sented by regression Model 1. The public providers (black
(significance) (0.001) (0.092) squares) have a lower turnover than the contract providers
R Squared = 0.20 (hollow diamonds), though there is considerable overlap
90%
80%
70%
Annual Turnover
60%
50%
Contract
40% Public
Trendline-Contract
30%
Trendline-Public
20%
10%
0%
$7 $8 $9 $10 $11 $12 $13 $14 $15 $16
Starting Hourly Wage
Figure 5-1. Starting wage, public/private contract providers, and turnover.
