Acquisition of workforce credentials—certificates or licenses that are earned over a short time period and which signal mastery of a specific career-relevant skill—has surged in recent years. For example, U.S. Department of Education data show that short-term (one year or less) certificate attainment grew at a rate of 33 percent between 2013 and 2023. By comparison, bachelor’s degree attainment grew at a mere 8 percent over the same time period while associate degree attainment fell by 5 percent. This rapid rise in the pursuit of credentials has led to concerns over an equally rapid rise in low-value or low demand credentials that cost money to earn but don’t produce a measurable economic benefit for earners. A new report from AEI and Burning Glass Institute digs deep to try and identify which types of credentials are beneficial to earners and which are not.
The research team uses data from Burning Glass Institute’s comprehensive labor market database, called Lightcast, which comprises the detailed career histories of over 65 million Americans, and Credential Finder, an exhaustive registry of more than 1.1 million credentials offered by universities, employers, labor unions, nonprofits, and many other entities in the United States. They start by identifying a set of the most-commonly earned credentials—a total of 23,444—then use advanced AI and natural language processing tools to gather detailed information about the education, employment, wages, and demographics of the individuals who earned those credentials. Labor market outcomes for credential earners are compared to a counterfactual cohort of similar workers (matched on gender, race/ethnicity, education level, work experience, and pre-credential occupation) who did not pursue the given credential, so as to isolate the impact of the credential on three outcomes of interest: wage changes, job promotions, and job switches. Additionally, they analyze the more than 2,050 providers from whom these credentials were earned, looking for evidence of differential quality or effectiveness among them.
On the upside, the researchers found that the top 10 percent of credentials examined provide an incremental earnings boost of nearly $5,000 annually just one year out from earning the credential. Nursing credentials seem to provide the biggest returns. On the downside, the average credential earner overall gets only $1,200 more than their non-credential-earning peers. Depending on the cost of the credential program, it could take years for the average earner to break even. This wide span of wage outcomes persists even when narrowed to specific job fields. Meanwhile, very few of the most common credentials led to promotions, with the share of credential earners moving up in their field only 4 points higher than it would have been without the credential. The maximum boost is 15 points, in the project management field (think Six Sigma certification and the like).
Job switching is another strong motivator for pursuing a new credential. The results here are variable, with earners in the bottom decile of credential quality seeing a 3-percentage-point bump in job change success, while the top decile of credential quality see a 20-percentage-point bump compared to job switchers without credentials. Once again, nursing is the area where earning credentials is most likely to lead to successful job changes.
As for provider quality, the researchers find a mixed bag. There seems to be no direct connection between a well-known “brand name” provider and outcomes. One example provided is Stanford University. Their (now-discontinued) Data Science Foundations program was associated with $4,200 in incremental wage gains, while their project management certification failed to boost wages meaningfully for any credential earner. A similar disconnect was found among certain credentials offered by LinkedIn. The findings suggest there’s a complex dynamic at work among providers, specific credentials, credential-earners’ goals, and employers’ mindsets that will require more analysis to understand.
Short-term credentials are more attractive than ever, as they can help learners master workplace skills on a flexible schedule at lower cost than a college degree and potentially lead to higher pay and/or a better job. These benefits explain the rapid rise in attainment. The authors of this report conclude from their analysis, however, that “most credentials fail to deliver” on the promise. They call for “a new mechanism for assuring quality,” eschewing process-based evaluations that are the hallmark of traditional accreditation regimes, and instead focusing on empirical data on the outcomes that earners experience.
SOURCE: Matt Sigelman et al., “Holding New Credentials Accountable for Outcomes: We Need Evidence-Based Funding Models,” AEI and Burning Glass Institute (June 2025).
