The Labor-Market Returns to Community College Degrees, Diplomas, and Certificates

Abstract

This paper provides among the first rigorous estimates of the labor-market returns to community college certificates and diplomas, as well as estimating the returns to the more commonly-studied associate's degrees. Using administrative data from Kentucky, we estimate panel-data models that control for differences among students in pre-college earnings and educational aspirations. Associate's degrees and diplomas have quarterly earnings returns of nearly $2,400 for women and $1,500 for men, compared with much smaller returns for certificates. There is substantial heterogeneity in returns across fields of study. Degrees, diplomas, and -for women -certificates correspond with higher levels of employment.

Flexibility at a cost – Should governments stimulate tertiary education for adults?

“…The benefits appear sufficient to cover the total costs, although the calculations are sensitive to assumptions regarding the foregone production value. Jepsen et al (2014) report results for students completing community college certificates, diplomas or associate degrees in Kentucky. The comparison group consists of enrollees who did not accomplish the respective awards (approximately 70 percent).…”

The Earnings Returns to Graduating with Honors: Evidence from Law Graduates

“…These studies mainly identify local average treatment effects at the lower end, whereas the present study estimates the returns at the upper end of the education distribution. Thus, we contribute to and complement the relatively small body of literature on economic returns to certificates and college degrees (Kane and Rouse, 1995;Jacobson et al, 2005;Jepsen et al, 2014). Overall, this is one of the first studies documenting that graduating from university with an outstanding performance has considerable causal effects on labor market earnings.…”

“…Hoekstra (2009) and Saavedra (2009), for example, use a fuzzy regression discontinuity design based on university admission rules and report sizable positive effects of graduating from particular colleges on labor market outcomes such as employment and earnings. Kane and Rouse (1995), Jacobson et al (2005) and Jepsen et al (2014) study economic returns of attending colleges in the United States. The most recent study by Jepsen et al (2014) analyzes labor market returns to community college degrees, diplomas, and certificates based on administrative panel data from Kentucky.…”

“…Kane and Rouse (1995), Jacobson et al (2005) and Jepsen et al (2014) study economic returns of attending colleges in the United States. The most recent study by Jepsen et al (2014) analyzes labor market returns to community college degrees, diplomas, and certificates based on administrative panel data from Kentucky. The authors find sizable positive returns, with associate's degrees and diplomas resulting in quarterly earnings returns of around $1,500 for men and $2,000 for women.…”

Where Are the Returns to Lifelong Learning?

“…Instead, we follow recent studies specifically investigating the labour market effects of adult education (Blundell et al, 2000;Jenkins et al, 2003;Albrecht et al, 2005;Headey and Warren, 2005;Jacobson et al, 2005;Zhang and Palameta, 2006;Silles, 2007;Stenberg and Westerlund, 2008;Blanden et al, 2010;Jepsen et al, 2014;Huff Stevens et al, 2015) by exploiting the longitudinal nature of the HILDA Survey data. We essentially compare the changes in labour market outcomes from before to after a spell of adult engagement in education with changes for similar individuals who do not engage in education over the same period.…”