Community College Baccalaureate Degrees Offer Strong Labor Market Returns

A large majority of students who start at a community college with the intention of completing a bachelor’s degree don’t, putting them at a disadvantage in today’s economy. At the same time, even in a global pandemic, there is a shortage of baccalaureate qualified workers to fill jobs in many “applied” fields such as in healthcare and computer science and information sciences. One strategy 23 states have adopted is to allow some or all of the community colleges in their states to offer “applied” baccalaureate degrees in what were once terminal associate degree areas.

While this policy appears promising for students, employers, and states, there are questions about whether bachelor’s degrees awarded by a community college offer the same employment outcomes to students as a degree from a four-year college. To begin to answer these questions my colleagues and I at the Community College Research Initiatives (CCRI) at the University of Washington compared the employment rates and earnings of students who graduated from a community college baccalaureate (CCB) program to students who graduated from a similar program at one of the four-year regional universities in Washington state. The graduates were in four program areas, business, computer and information sciences, healthcare, and visual and performing arts. We chose Washington because it is one of two states (Florida is the other) where CCB degrees have scaled statewide; in Washington 29 of the states’ 34 community colleges offer over 130 baccalaureate degree programs.

These programs are graduating a more diverse group of students than universities. Delivering on the state’s promise to graduate students who are underrepresented among bachelor’s degree holders and who are prepared for critical workforce sectors, we find a larger proportion of Washington’s CCB graduates are students of color than the university group, and we also find these graduates are older, on average, than their university peers. The fact that CCB degree recipients are more diverse fulfills an important goal of these degrees.

Graduates of CCB programs are also more likely to be employed in the state of Washington. Looking at employment, we find both the CCB and university graduates have high employment match rates in all four program areas, with CCB graduates demonstrating a slightly higher employment match rate than university graduates. This finding implies that CCB graduates are staying within the state of Washington to find employment at a slightly higher rate than their university graduate peers, also suggesting the importance of CCB degrees in developing talent that remains in communities and close to home.

Looking at earnings, CCB graduates and university graduates start off relatively similar but some differences emerge over time. Both groups show strong growth in earnings in all four program areas, with CCB graduates starting out slightly higher than university graduates after one year of employment in all but healthcare. However, by three years after graduation university graduates garnered higher annualized earnings in both healthcare and business. For example, from the first to the third year post-graduation, the salaries of CCB graduates in healthcare rose from $50,000 to $68,400 annually while university grads rose from $51,600 to $72,400 annually.

We didn’t have enough labor market information to analyze computer and information sciences graduates’ earnings after three years but for the other three program areas, we found that university graduates had a steeper rise in earnings after three years than their CCB peers. Whereas some program areas, like healthcare, didn’t show much of a difference, CCB business graduates earned $9,200 more after three years to bring their annual earnings to $49,200 while university graduates earned $20,200 more than their baseline salary at graduation, bringing their annual earnings three years after graduation to $53,200. Whether this trend will continue and extends to other program areas is unknown, and calls for additional longitudinal data on labor market outcomes.

We also disaggregated earnings by race and ethnicity for both university and CCB graduates and found differences in annualized earnings. White university graduates consistently earn more than other racial and ethnic groups in all program areas but healthcare. The picture appears more mixed for CCB graduates with some wage gaps closing over time for racially minoritized groups, i.e., African-American CCB graduates in healthcare and Latinx CCB graduates in business and computer and information sciences where earnings after three years surpassed their white peers. Whether this positive trend will be apparent over a longer time is unknown.

However, these promising results are tempered by an earnings gap between males and females that leaves females well behind males in every program area we examined. We flag this finding as one of the most important of our research because our data show the gender wage gap is endemic to both CCB and university degree holders. These substantial wage differences — the largest being a $15,600 annual earnings difference between male and female CCB graduates in healthcare three years after graduation — will lead to wealth disparities inconsistent with the equity agenda purported for CCB degrees.

This early evidence suggests that expanding baccalaureate programs at community colleges can help to increase the share of Americans with degrees, including increasing the number of people of color and older people with bachelor’s degrees. Promising employment outcomes also surface for CCB graduates; however, earnings results present a more complex picture. Knowing the economic pay-off of bachelor’s degrees, it is important that CCBs address rather than perpetuate inequities in economic outcomes.

Since the Great Recession, almost 75 percent of new jobs have gone to bachelor’s degree holders and the current pandemic has only exacerbated instability and job loss for those without these degrees. By creating more opportunities for students to experience the benefits of baccalaureate degrees, CCBs should contribute to more equitable college completion and employment. In this time of COVID-19, it makes sense to consider the potential of CCB policies to help more students complete bachelor’s degrees that lead to living-wage employment.

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