The Power of Certificates and Credentials

Technical Education Magazine

A recent report from the Georgetown University Center on Education and the Workforce, Certificates: Gateway to Gainful Employment and College Degrees, proposes that “In an American economy where the advancement of technology and globalization means that a high school diploma alone is no longer able to provide family-sustaining earning to many, certificates represent one piece of a multi-pronged solution on the road to a workforce with 60 percent postsecondary attainment,” This column reviews the major findings in the report. Although postsecondary certificates vary widely in the benefits they provide, the report finds that since they tend to encourage further education and college completion, they have become a cost-effective means of enhancing postsecondary educational attainment as well as gainful employment. Even if only certificates with “clear and demonstrable economic value”—certificates with returns at least 20 percent above the earnings of the average high school graduate—were counted toward postsecondary attainment, the United States would “move from 15th to 10th in postsecondary completions” among OECD countries for 25- to 34-year-olds. (See executive summary.)
There are wide variations in the economic returns of certificates. While those with college degrees earn, on average, more than those whose highest attainment is a certificate, many certificate holders do earn more than those with bachelor’s degrees. Among male certificate holders,39 percent earn more than the median male with an associate degree and 24 percent earn more than the median male with a bachelor’s degree. Thirty-four percent of female certificate holders earn more than women with associate degrees and 24 percent of women with bachelor’s degrees.

These earnings premiums depend on certificate holders working in their fields of study. For example, in computer and information services, men who work in field earn $72,498 per year, which is more than for 72 percent of men with associate degrees and 54 percent of men with bachelor’s degrees. Women in the same field earn an average of $56,664, which is more than for 75 percent of women with associate degrees and 64 percent of women with bachelor’s degrees. Only 24 percent of men and 7 percent of women with certificates in computer and information services, however, work in-field. Working out-of-field is not atypical. Less than half (44 percent) of certificate holders work in a field related to their certificate training. Those who work in-field earn 37 percent more, on average, than those who work out-of-field.

Other findings worth noting: (1) certificates lead to higher salaries for men than for women; (2) a higher percentage of African-Americans hold certificates than any other racial or ethnic group, yet African- Americans get the smallest earning premium from certificates; and (3) states vary significantly in certificate production.