Labor-Market Outcomes

For most students, finding a well-paying job is the central reason that they enroll in postsecondary education. Switching jobs or changing careers is particularly a driving factor among older, returning students.¹ Yet across national studies of the labor-market returns of certificate programs, findings are decidedly mixed.

Research has consistently found that long-term certificates do increase workers’ odds of being employed.² Studies have found that short-term certificates, however, are varied in their effectiveness at ensuring employment. Moreover, national survey data show that employment rates among certificate-holders (77 percent) are lower than rates among their peers who completed either an associate or bachelor’s degree (84 and 87 percent, respectively).³

Earnings increases are also mixed. A recent review of the literature found that, while on average, the earnings increase associated with short-term credentials ranged between 10 and 20 percent—with the larger increase going to adults with only a GED or less—there was large variance in the returns by gender and occupation. The credentials held by women and workers in female-dominated occupations earned substantially less than men and workers in male-dominated occupations.⁴ Three separate analyses of the Adult Training and Education Survey found similar disparities along gender and occupational lines, with women earning consistently less than men despite similar levels of training.⁵ Moreover, the short-term credentials associated with the highest earnings are often for occupations that are dominated by men, such as construction assistant, welder, or truck driver. Women are certainly capable of doing these jobs, but they are often not practical or appealing options, particularly for women with children. Truck driving might pay well, but it also involves long periods of time away from home. Construction jobs might be locally available, but construction sites are often not friendly environments for women. The issue is not that women are choosing short-term credentials for low-wage jobs among many other short-term credentials that lead to good jobs because they do not care about the pay. Rather, the short-term credentials and jobs most readily available for, and commonly occupied by, women in this segment of the labor market are, overwhelmingly, for low-wage jobs.

A multi-state study of community college students across several states, conducted by the Center for Analysis of Postsecondary Education and Employment (CAPSEE), found “positive but modest returns,” on average, to completing a certificate program.⁶ But the report also notes that other studies have found differing levels of those returns, others have found no impact on labor-market outcomes, and some have even found negative returns.⁷ Another CAPSEE report that explored available research found a consensus that associate degrees provide significant earnings gains, and that, to a lesser extent, long-term certificates also do. However, there was no clear conclusion as to the labor-market value of certificates that require less than a year to complete. Some have found small positive effects, including relative to those with only a high school diploma or equivalent, while others have found negative returns or inconclusive results.⁸ A recent New America report found that more than half of earners who have only a very-short-term certificate earn poverty-level wages, with income disparities for minorities and women, while two in five certificate completers reported not being employed at all.⁹ Contrasted with the labor-market returns of two- or four-year degree programs, the research consistently shows that, on average, the longer the program, the greater the return.¹⁰ Additionally, a study that looked at both non-credit and for-credit programs found that the labor-market value of non-credit certificates was “consistently lower,” particularly for women and older adult workers.¹¹

Other studies that have been conducted within particular states, rather than across national or multi-state data, have been similarly confused. A study of programs in North Carolina and Virginia, for instance, found that short-term certificate programs in both states positively impacted graduates’ earnings, albeit with a relatively small magnitude, with $278 in increased earnings per quarter in North Carolina and $153 in Virginia.¹² Another study of the Kentucky Community and Technical College System found a $300 per-quarter benefit to graduates.¹³ But studies have found the returns of certificate programs of less than a year are very small, and sometimes negative, in states that include Arkansas and Virginia.¹⁴ A study of Washington State found that short-term certificates did not have any real impact on either employment status or hours worked per week for their completers, but had negative returns for women.¹⁵

Even where small earnings increases exist, research suggests that the benefits of short-term certificates fade relatively quickly.¹⁶ Studies of multiple states have shown that the labor-market value of a certificate disappears within several years.¹⁷ For instance, a study in California found that the earnings gains received from a short-term certificate flatten within seven years after leaving the program, and those of long-term certificates begin to fall over the same timeframe, yet the labor-market boost of an associate degree is still strong.¹⁸

Most of the available research on short-term certificates consistently reaches one common conclusion: The value of certificate programs is highly dependent on the occupation for which the credential is preparing students. Research finds substantial variations in the labor-market returns to certificates across different fields of study.¹⁹ An evaluation of nationally representative data from the 2016 Adult Training and Education Survey found certificate earners of very-short-term programs in health care make up to $50,000 less in median yearly earnings than individuals with a very short-term certificate in construction trades, for instance.²⁰ However, state-level evaluations of short-term certificates by field of study may vary substantially from those national data. One multi-state study found that earnings gains were highest across every state in health-related programs.²¹ Other research has found that the returns from health-related fields are clearest for long-term certificates (those that take more than a year to complete), whereas pockets of high-value short-term certificates varied considerably across states.²² And training programs financed through the public workforce system did not impact employment or earnings except when paired with intensive career services, according to a Department of Labor evaluation.²³

In general, though, research has found that short-term certificates in occupational fields—as contrasted with those in academic fields, like the humanities and social sciences—have a greater impact on graduates’ labor-market returns.²⁴ However, even occupational fields are variable in their outcomes for graduates. A study of California community college graduates found some fields that had consistently negative returns—education, fine arts, and cosmetology/barbering among them—and others that had small positive returns—including health fields and paralegal programs. A few programs of study, like automotive technology and manufacturing, had stronger positive returns.²⁵ Similarly, a Florida study found that some technical certificate programs had positive returns for students.²⁶

Data from other states drive home the importance of these variations. As reported by The Institute for College Access and Success, 90 percent of students in Iowa were employed after enrolling in non-credit, short-term programs, with average earnings of $27,000 per year, yet more than two in five of the students were enrolled in health-related programs, whose alumni earned an average of $17,200.²⁷ The averages obscure significant disparities in the outcomes of students who attended different programs.

One area in which certificates may have value is in helping workers to change careers, albeit not accompanied by any increase in earnings. Students in certificate and associate degree programs that are occupation-specific tend to be older than students in academic or bachelor’s degree programs,²⁸ and many are training for a new or different career.²⁹ However, a study of certificate programs in two states found suggestive evidence that while many workers enrolled and switched from low-earning to higher-earning fields, a significant proportion of students also made the opposite switch.³⁰

Additionally, there is evidence to suggest certificate-holders do not experience labor-market outcomes equally, largely due to systemic differences in the field students choose to enroll in, the occupations they enter, the gender and racial pay inequities to which they are subject, and their prior educational attainment. In particular, there are significant disparities by gender. While men are enrolled heavily in higher-earning occupations and experience higher returns to certificate programs, women make much less, even compared with men in the same fields and with the same credentials.³¹ A study from the Urban Institute confirmed that while “field of study explains some of this [gender wage gap] difference…there are also gender gaps within fields.”³² Even self-reported data on a consumer survey found a much larger reported income among men with certificates or certifications than among women.³³ Men are also more likely than women to be employed after completing a certificate, certification, or license, and more likely to have employers pay the cost of their training.³⁴ An exception has been long-term certificates in health fields, for which studies have found a much stronger wage gain for women.³⁵ One study reported that short-term programs were “an extreme case of variation by gender” among community college credentials.³⁶

Returns also appear to be strongly divergent by race/ethnicity. In California, white and Hispanic men saw stronger returns than Black men to short-term certificates, whereas Black men and women both fared better from long-term certificates.³⁷ A study using the Survey of Income and Program Participation found similarly concerning results; Hispanic workers with certificates earned slightly less than white workers with certificates, but Black workers with certificates had the lowest earnings among workers of any race/ethnicity.³⁸ In general, though, there is startlingly little research on the outcomes of students by race, particularly given that Black students are far more likely to enroll in and complete certificate programs than higher-level, better-paying degree programs.

Unsurprisingly, outcomes may also vary depending on the prior educational backgrounds of certificate completers. A third of those who hold a postsecondary certificate also have an associate degree or higher.³⁹ Research from the Georgetown Center on Education and the Workforce found that workers with both a certificate and a degree see a relatively small added benefit to wages—6 percent for those with an associate degree plus a certificate and 3 percent for those with a bachelor’s degree alongside their certificate.⁴⁰ Isolating the value of a short-term certificate is critical to understanding their value to workers and employers.