The National Bureau of Economic Research has released a working paper in a series designed to estimate the earnings returns for vocational or technical education students in California community colleges—the nation’s largest such system. While there is a large body of research pertaining to the financial returns of earning a four-year college degree, very little has been conducted on the income of technical program graduates.
Researchers tracked students through their postsecondary institutions and into the labor market between 1992 and 2011. Using administrative records from the California Community College Chancellor’s Office and California’s unemployment insurance system, they were able to match roughly 93 percent of students in the college data to earnings records. The evaluation of certificate and degree holders was divided into four categories: associates of science/arts degrees, 30–60-credit certificates, 18–30-credit certificates, and 6–18-credit certificates. They then analyzed these four groups’ returns in the six largest major employment areas: business and management, information technology, engineering and industrial technologies, healthcare, family and consumer sciences, and public protective services.
The study authors found substantial differences in financial returns for different programs—even among credentials that require the same number of credit hours—and concluded that “all CTE education programs are not equal.” The number of credit hours didn’t necessarily correlate with the magnitude of return. Short healthcare-related programs, for example, yielded significantly greater returns than similar programs in the five other employment areas. Surprisingly, those who completed information technology degrees tended to see underwhelming returns overall.
When interpreting the study’s findings, the authors note several potential sources of bias. Among them: the Great Recession occurring toward the end of the sample period; the fact that top six employment areas included in the study only cover about half of all technical degrees granted during this period of time; and considerable heterogeneity in characteristics of students across programs (including gender and age at enrollment).
To truly understand the labor market payoff of technical degrees, it’s clear that more research is needed. But this study indicates that completing this kind of postsecondary education can have positive earnings effects for students–meaning they must be part of our strategy for narrowing the opportunity gap that persists in America.
SOURCE: Ann Huff Stevens, Michal Kurlaender, and Michel Grosz, “Career Technical Education and Labor Market Outcomes: Evidence from California Community Colleges,” National Bureau of Economic Research, Working Paper 21137 (April 2015).
