Direct from Washington, March 2009

The Value of an Occupational Certificate

Earning an occupational certificate has a larger payoff in terms of income than achieving an associate degree from a community college, according to a surprising research study conducted by CNA and the Hudson Institute. The study was financed by the Gates Foundation.

As reported in Inside Higher Ed, the study used a rich source of student data from Florida’s longitudinal records system on 225,000 students who were in public high schools in 1996, following them through the state’s public colleges and beyond for 10 years. Florida probably is the only state with such an extensive data system, although the U.S. Department of Education is providing seed money for other states to develop similar data collections and such an initiative was originally included in the Administration’s stimulus package.

The study, which was presented to commentators from the research community at a meeting at the Hudson Washington office, focused on outcomes for low-income students in the higher education system. As might be expected, access to college depended heavily on students’ ability to pay for it. More affluent students were twice as likely as low-income students to complete a degree within six years. High school grades also had a significant impact on college outcomes. More than half of students with an A average in high school who attended college within two years of graduation received a B.A. or graduate degree, while 82 percent of C students who entered college within two years did not earn any credential.

The higher the credential, the more students earned. Students who earned a certificate had median earnings 27 percent higher than those with no college credential, but students with just an associate degree had median earnings only 8 percent better than those with no credentials. Another unexpected finding was that students who earned a C average in high school were only slightly less likely than A students to earn a credential in a health-related or other higher-paying fields.

These two results, according to the study’s authors, “suggest that it is feasible for students who attend two-year colleges and do not go on to complete four-year programs to increase their earnings substantially by completing the courses needed to obtain a certificate.” Median incomes were highest in health-related fields.

(“Pathways to Boosting the Earnings of Low-Income Students by Increasing Their Educational Attainment,” Hudson Institute, www.hudsoninstitute.org)