Association for Public Policy Analysis & Management

Occupational certification, or the provision of voluntary credentials by trade, industry, and professional associations, is a growing phenomenon affecting workers in a wide range of occupations.  Using a survey of a cohort of young American workers, this paper demonstrates that there is a persistent wage premium associated with earning occupational certification that cannot be easily explained as an effect of higher quality workers self-selecting into certification programs or the distribution of certification programs into higher-paying occupations.  The wage premium is highest for individuals with lower levels of formal education, suggesting that certifications hold significant promise as a substitute for college degrees for those unable to pursue or uninterested in credentials offered by the formal postsecondary education system.  Certification also appears to disproportionately benefit those who have otherwise had a stable transition between formal education and the workplace.  While certification offers substantial benefits for those in a position to attain and leverage it, its promise as an institution to facilitate young workers’ transition into the labor market is hampered by disparities in who can easily access certification programs.