Panel Paper: Estimating the Returns to Short-Term and Long-Term Certificates

Friday, November 8, 2013 : 9:45 AM
Washington Ballroom (Westin Georgetown)

*Names in bold indicate Presenter

Madeline Trimble, Community College Research Center and Di Xu, CAPSEE, Teachers College
Since the “Great Recession” began, there has been considerable national attention focused on how to retrain dislocated workers, with community colleges often cited as a potential solution.  President Barack Obama argued in the second presidential debate of 2012 that, “I want everybody to get a great education… I also want to make sure that community colleges are offering slots for workers to get retrained for the jobs that are out there right now and the jobs of the future.”  But are the programs that are supposed to train workers for the jobs of the future working? Are students who earn occupational credentials from community colleges finding employment and earning more money than they otherwise would have?

Despite the rapid increase in the popularity of certificates and their increasingly important role in the postsecondary landscape, relatively little research has been conducted to explore the economic benefits of certificates in the labor market. Most empirical research about the impact of post-secondary education on earnings has centered on the bachelor’s degree, and even those that examine sub-baccalaureate credentials have often focused on associate degrees and have failed to differentiate certificates by the length of time required for completion. Even the limited research that might shed light on returns to certificates (e.g. Kerckhoff & Bell, 1998; Grubb, 2002; Jacobson & Mokher, 2011; Jepsen, Troske, & Coomes, 2012; Dadgar & Weiss, 2012) offers findings that are often inclusive, due to small sample size, particular state context that might not be representative of overall certificate programs, possible measurement errors in self-reported earnings, limited controls for ability bias, short follow-up period after degree completion, and failures to account for the wide variation in length of certificate programs. 

 In this study, we identify the returns to certificates for community college students in three separate large community college systems: North Carolina, Virginia and Washington State using administrative education data (including transcripts) matched with quarterly earnings data from Unemployment Insurance records.  Our methodological approach is an individual fixed effects strategy that is analogous to difference-in-differences: in effect, we compare the gain in earnings between the period prior to enrolling in college and after exit for students who earn a credential while at the community college versus those who do not.  We next present our main findings and sub-group results by gender and age at time of entry, also exploring non-linear findings that suggest returns to certificates diminish over time.  We also differentiate returns by field, finding extremely heterogeneous results by field, with substantial positive returns to short-term certificates in protective services and both long-term certificates in allied health and nursing – but not much else.

 There are several implications of these results for policymakers.: support should be offered to programs to improve career pathway opportunities for students in low-return fields.  It also may be useful to focus funding intended to support the completion agenda and worker retraining in high-return fields and programs.