In this study, the general hypothesis tested was that differences in rate of employment activity between baccalaureate and diploma nurses are due to effects of extraneous and intervening variables and not to intrinsic differences in the educational process. Mailed questionnaires from 1,475 nurses registered in the State of Indiana provided data on two measures of employment activity, as well as four control variables: marital status, spouse's income, presence of young children at home, and disillusionment with career. Among recent graduates, there was a negative association between possession of the baccalaureate degree and current employment status (γ = -.359, p <.05). It was expected that holding constant the four control variables would reduce this association to or near zero. The opposite was generally the case, however; controlling for marriage, children, and disillusionment actually increased the association between type of education and employment status. Differences in employment activity between the two types of graduates therefore can not be accounted for by “traditional” variables used in the study of female labor-force participation.