On January 16th the U.S. Census Bureau released its first-ever report on the prevalence of alternative (non-degree) credentials. According to the report, over 50 million U.S. adults – one in four – have obtained a professional certification, occupational license, or educational certificate. These alternatives to Bachelors and Associates degrees make up the large and growing world of non-degree credentials that Americans are earning in record numbers as they try to get a leg up in in today’s competitive labor market.
Over the last decade, there has been a proliferation of credentials beyond the academic degree, including career-focused educational certificates, industry-based certifications, technical diplomas, and more. Their growth is a reflection of a soft labor market with rising skills demands in which both job seekers and employers have been looking for more ways to document and communicate specific abilities and experience. These alternative credentials can be quite valuable for adult and working learners seeking opportunities to document their existing skills, without having to enroll in degree programs. They can also be very helpful to employers because they often provide a more reliable and specific assessment of the skills their holder possesses than does a traditional degree. In the case of some sectors – information technology in particular – industry certifications can be even more valuable than a degree for job seekers, as legions of IT-certified college dropouts in Silicon Valley can attest.
Today’s report marks an important first step in building a knowledge base around alternative credentials that can inform policy and institutional practice moving forward.
But while non-degree credentials have become more visible, relatively little is known about their prevalence, value, and role in helping individuals in the labor market. Today’s report marks an important first step in building a knowledge base around alternative credentials that can inform policy and institutional practice moving forward. Although there are important differences between these credentials – industry certifications are issued by private groups representing employers while licenses are awarded by government agencies responsible for ensuring public safety, for example – knowing more about them is essential to efforts to better align education and employment. (For more information on the differences between certifications, licenses, and certificates, see the definitions of page two of the report).
Two findings stand out as particularly important to those focused on improving the educational and labor market outcomes of individuals without a Bachelor’s degree.
- Holders of professional certifications, licenses or educational certificates earned more than those without an alternative credential at each level of education below a bachelor's, including those with some college but no degree.
- There were 11.2 million adults with a high school diploma or less education who held a professional certification or license. If this alternative credential were incorporated into an expanded measure of education, these adults might be re-categorized into the "more than high school" category, representing a shift of almost 5 percent of the adult population.
The earnings return to alternative credentials for those without a college degree is significant and provides support to those working to clarify the skills needed for the millions of mid-skilled jobs that require more than high school but less than a college degree. While no one wants to create barriers to entry to middle-skilled jobs by over-regulating entry into them, alternative credentials like certifications that signal specific competencies can help the labor market function better by making it easier for jobseekers and employers to find one another. The findings point to the effectiveness of non-degree credentials as signals at the lower end of the job market, where they are relatively scarce.
The finding that over ten million adults who lack a postsecondary education credential have a professional certification or license will be welcome news to anyone concerned about our OECD rankings or postsecondary educational attainment rates. This report confirms that Americans are committed to building their skills after high school, even if they do not complete college. Creating more opportunities for them to do so should be a focus of our education and workforce development systems.
The report’s findings hold important insights for a wide variety of stakeholders in higher education. For people who don’t have the time, disposition, or financial means to complete a college degree, the positive economic return to alternative credentials is welcome news. For education and training providers worried about improving the labor market outcomes of their students, the report points to the value of embedding stackable and competency-based credentials into their programs. And for the research and advocacy community, the results raise a host of new and important questions about how credentials function at different tiers of the labor market, how we ensure their quality, protect credential-seekers from worthless credentials, and use non-degree credentials to improve job quality. Thanks to the Bureau’s efforts, we have a lot more information to work with as we address these exciting challenges.