The economic benefits of community college certificates in the job market

 

(Valencia College)

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Over the last decade, national leaders and policymakers have pressed states to produce more college graduates as a way to help the United States remain globally competitive and ensure its long-term economic growth. Public and private universities facing this “completion agenda” have launched a host of new programs aimed at improving student retention and degree completion. State and federal legislators began to put intense pressure on community colleges to also increase the number of students earning associate degrees and program certificates.

Since 2006, the number of people completing certificates – a credential that typically requires less time to finish than a two-year degree – has risen substantially at many schools. Institutions across the U.S. awarded nearly 1 million certificates in 2013-14, or 33 percent more than they had in 2006-07, according to the National Center for Education Statistics. A 2012 report from Georgetown University’s Center on Education and the Workforce refers to certificates as “bite-sized educational awards … [that] provide the on-ramp to college education and middle-class jobs for low-income, minority and immigrant Americans who are often the first in their families to attend college.” The report also suggests certificates have become the second most common college credential behind the bachelor’s degree.

But while a multitude of scholars over the years have published numerous studies examining the value of a bachelor’s degree, few have looked at certificates. Two researchersDi Xu, an assistant professor in the school of education at the University of California, Irvine, and Madeline Trimble, a data analyst at Columbia University’s Community College Research Center — sought to fill that knowledge gap. They investigated whether earning a community college certificate leads to higher pay. For the study, “What About Certificates? Evidence on the Labor Market Returns to Nondegree Community College Awards in Two States,” Xu and Trimble poured over administrative data collected from community college systems in Virginia and North Carolina. They matched community college records with enrollment and graduation data from the National Student Clearinghouse. Those records were further matched with quarterly earnings information taken from Unemployment Insurance records in each state.

The analysis, published in the journal Educational Evaluation and Policy Analysis in December 2015, focuses primarily on individuals who earned certificates in Virginia and North Carolina and worked in the same state after receiving their certificates. The authors used earnings data from the first quarter of 2005 to the first quarter of 2012 in North Carolina and data from the first quarter of 2005 through the first quarter of 2013 for Virginia.

Among the key findings:

  • Earning a community college certificate generally leads to higher earnings. The financial benefit varies considerably, though, and depends on several factors, including field of study, the state where the person is employed and whether the credential is a short-term certificate (taking less than one year of full-time study to complete) or a long-term certificate (taking a year or more of full-time study to complete). A long-term certificate in the field of mechanics, repair and welding, for example, was associated with a $1,632 increase in quarterly earnings in Virginia. A short-term certificate in the same subject area was associated with a $240 increase in quarterly earnings in North Carolina.
  • On average, short-term certificates were associated with an additional $278 in quarterly earnings in North Carolina. In Virginia, the difference was $153.
  • Long-term certificates were associated with an average increase in quarterly earnings of $953 in North Carolina and $200 in Virginia.
  • In both states, long-term certificates in nursing resulted in the largest increases in quarterly earnings. The increase was $3,515 in North Carolina and $1,644 in Virginia.

The study found substantial differences in certificate offerings and economic returns between the two states. Some of the differences might be explained by how community colleges in North Carolina and Virginia designed their certificate programs. In North Carolina, community colleges seemed to emphasize vocational programs. In Virginia, on the other hand, most long-term certificates focused on general education and were aimed at preparing students for continued studies in college rather than directly entering the job market. The authors point out that while certificates in some fields may not result in increased earnings, they may increase an individual’s chance of finding a job or breaking into an industry that has other benefits such as flexibility or stability.

Related research: A 2014 study in the Journal of Labor Economics, “The Labor-Market Returns to Community College Degrees, Diplomas, and Certificates,” indicates that associate degrees and diplomas have quarterly returns of about $2,400 for women and $1,500 for men and smaller returns for certificates. A 2016 report from the Community College Research Center at Columbia University, “Tracking Transfer: New Measures of Institutional and State Effectiveness in Helping Community College Students Attain Bachelor’s Degrees,” suggests new ways that policymakers can improve the effectiveness of programs that help community college students transfer to four-year universities.

 

Keywords: junior college, state college, vo-tech, vocational school, technical school, vocational degree, workforce development, job training, return on investment

    Writer: | Last updated: May 25, 2016

    Citation: Xu, Di; Trimble, Madeline. “What about Certificates? Evidence on the Labor Market Returns to Nondegree Community College Awards in Two States,” Educational Evaluation and Policy Analysis, December 2015. doi: 10.3102/0162373715617827.
     

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