Finding the Market Value in Certificates

In “Certificates: Gateway to Gainful Employment and College Degrees,” Georgetown University’s Center on Education and the Workforce offers good news to those who have long-argued there was economic value in a non-degree certificate.

Non-degree certificate programs train participants in job-specific skills, like medical administration and paralegal studies. Certificates, according to the authors, are, “recognition of completion of a course of study based on a specific field, usually associated with a limited set of occupations.”

Certificate programs, the study notes,“take place in the classroom, mainly in public, two-year schools or private, for-profit, non-degree granting business, vocation, technical, and trade schools.”

The important question of certificates is what will they do for students who pursue them? This question has vexed certificate-skeptics for many years. Is there actually value in the labor market for an expensive certificate that doesn’t come with a degree?  The report’s authors, Anthony P. Carnevale, Stephen J. Rose, and Andrew R. Hanson, examined the number of certificates awarded nationwide, to whom they are awarded, and the premium for certificate-holders versus workers without a certificate.

On average, certificate holders earn 20 percent more than high school graduates with no postsecondary education, the report cites. But those returns are conditional: what you study and whether you work in the field in which your certificate was awarded, as well as your sex, race, and ethnicity, all factor in to how much your certificate is worth.

The study is impressed with certificates in computer and information services. For example, men holding these certificates and working in these fields earn $72,498 per year, which, they site, is more than 72 percent of all men with an Associate’s degree and 54 percent of all men with Bachelor’s degrees. Similarly, for certificates in business and office management, women earn $38,204 – more than 54 percent of women with Associate’s degrees and 41 percent of women with Bachelor’s degrees. But these premiums are conditional on working in-field. An information services certificate creates significantly less value if you work in, say, construction.

Certificates serve different purposes for different people. Two-thirds of certificate holders do not have two- or four-year college degrees when they begin work toward their certificate. But, a majority use certificates as a stepping-stone for future degrees. Sixty-two percent of those with certificates and Associate’s degrees got their certificate first. For women, the authors note, a certificate sets them above their peers, giving them more flexibility with part-time or temporary work, allowing them to stay at home with their children.

African-Americans and Latinos pursue certificates at higher rates than others, but, the study shows, these groups receive the lowest returns in salaries among certificate holders. African American women and men receive the lowest returns of all. There is also much disparity along gender lines. For example, men with certificates working in the lowest-paying field for their gender, cosmetology, still earn more than women in the highest-paying field for their gender, business and office management.

Despite the inequities, certificates are still valuable for individuals. For example, Hispanic men with a certificate will earn more than those with only a high school degree – 44 percent more. That rate is 41 percent for Hispanic women. Women who hold certificates, in general, will earn 16 percent more than women with just a high school degree.

The study says while the market for private for-profit colleges and certificate-awarding institutions is growing, the best deal for a certificate is still at public two-year institutions. There is much trepidation with the amount of debt that comes with a private for-profit certificate, which can cost as much as $20,000 annually (as opposed to the $7,000 annually at public two-year schools), and the low employment statistics that come out of private for-profit schools as opposed to public schools.

The study concludes that in an economy where a high school diploma alone can’t achieve family-sustaining wages, the desired outcome of degree-seeking students – gainful employment – can be achieved with a certificate.

Feature photo: cc/j.o.h.n. walker