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For the past several decades, the nation has operated under a simple principle: The surest path to labor-market success is through a bachelor’s degree at a four-year college or university. Annually, American postsecondary institutions grant far more bachelor’s degrees than associate degrees or nondegree certificates. While on average bachelor’s degree holders earn more than those with sub-baccalaureate credentials (associate degrees, certificates, and apprenticeships), student earnings vary widely based on the degree pursued, the major studied, and the school attended.
To explore that variation, we use state administrative data from College Measures to calculate five-year earnings and expected 20-year return on investment for students completing bachelor’s, associate, certificate, and apprenticeship programs in specific fields of study from public higher education institutions in Florida, Texas, and Tennessee. We draw three main lessons:
First, many associate degree and certificate programs offer valuable routes into the middle class.
Second, majors matter greatly with respect to postcollege earnings—no matter the degree level—and skills-oriented programs in health, engineering, and other technical fields are typically more remunerative than many programs in traditional academic fields.
Third, while state flagship universities offer many opportunities for employment with high earnings, there are many high-return programs at regional universities and community colleges.
There are certain caveats to the analysis: The earnings data are only for those who completed programs rather than all those who enrolled; earnings information does not account for the prior ability of those who select and complete certain majors versus others; high-paying sub-baccalaureate programs tend to have fewer graduates than their bachelor’s degree counterparts; and the skills imparted by technical programs may have greater diminishing returns over time relative to bachelor’s degree programs.
Limitations aside, these new data should add new dimensions to the current debate around the value of postsecondary education. We conclude that, if we move beyond our current fixation on the bachelor’s degree and widen the aperture to include all the postsecondary pathways at our disposal, far more educational options emerge that can lead students to economic success.
Students enroll in college for a variety of reasons: to obtain a general education, learn more about subjects that interest them, find purpose in their lives, and so on. As evident across numerous surveys, one of college students’ primary goals is to obtain a credential that will help them find a good job with good wages. Roughly 85 percent of first-time college freshman, for instance, cited the ability to get a better job as a “very important” consideration in deciding to attend college, the top reason cited by respondents.1
To that point, for the past several decades the nation has operated under a simple principle: The surest path to labor-market success is through a bachelor’s degree at a four-year college or university. Perhaps it is not surprising, then, that annually we grant far more bachelor’s degrees (roughly two million) than associate degrees (more than one million) or shorter-term, nondegree certificates ( just under one million).2 The number of associate degrees awarded likely understates the importance of the bachelor’s degree; roughly half of associate degrees are awarded to students from associate degree programs in the liberal arts or humanities, programs designed to prepare students for bachelor’s degree programs rather than the workplace.3
The claim that bachelor’s degree holders earn more than many people with shorter-term or no postsecondary credentials generally holds true. More precisely, Temple University economist Doug Webber estimates that the net present expected value of attending college (pursuing a bachelor’s degree) varies between $95,000 and $275,000, depending on the major.4 As this variation makes clear, though, not all bachelor’s degrees are created equal. There are significant differences in earnings outcomes depending on factors such as completing the degree,5 major or field of study,6 quality or selectivity of the institution attended,7 occupation after college,8 and so on.
Given this variation—and as the data we present below make clear—the bachelor’s degree may not always be the best option for graduates to find economic success after college. For one, bachelor’s degrees are usually costlier than shorter-term credentials: average net tuition, fees, room, and board were $14,210 at public four-year institutions in 2016–17, nearly twice the costs of community colleges.9 And a bachelor’s degree takes longer to complete than an associate degree or certificate, increasing costs in terms of the amount invested and forgone wages (keeping in mind that a bachelor’s degree usually takes more than four years to complete and many enrollees do not even make it to graduation). Indeed, Webber contends that attending college is “an unambiguously good investment for the vast majority of individuals with low to average college costs . . . [but when] costs of attending college are high . . . gains are far more tenuous.”10
This brings the value of credentials to the fore: Are costs of existing degree pathways commensurate to their long-term payoffs? Are there shorter, less expensive routes (e.g., associate degrees, certificates, and apprenticeships) that can lead to comparable or higher earnings than bachelor’s degree programs? Do we have full and reliable information on returns to these various credentials?
Research on returns to sub-baccalaureate credentials shows that at least some of them can be valuable postsecondary alternatives, and the path to higher wages does not run only through the bachelor’s degree. Recently, researchers Clive Belfield and Thomas Bailey found significant returns to associate degrees and certificates, to the tune of approximately $4,640 and $7,160 in average annual earnings gains for male and female associate degree holders (over those with no college) and $2,120 and $2,960 for male and female certificate holders, respectively.11 Another study by Mina Dadgar and Madeline Joy Trimble examined returns by field of study in Washington State and found that graduates with associate degrees in STEM, nursing, and construction earned a significant payoff and those with an associate in business, humanities, and allied health did not.12 Additional research using administrative data in several states demonstrates that certificate and associate degree holders in many applied or technical fields can actually outearn their bachelor’s degree counterparts five years post-completion, with graduates from some programs maintaining the earnings advantage at least 10 years after completing.13 Overall, the Georgetown Center on Education and the Workforce estimates that 28 percent of workers with an associate degree earn more than the median earnings of workers with bachelor’s degrees.14
The important question, thus, is not whether degrees have value but what types of knowledge and skills are in greatest demand and are, in turn, rewarded in the labor market. Framed this way, the degree a student pursues means much less than commonly held: It is the outcome that matters. And once we can measure more precisely what the labor market actually rewards, we can begin to identify specific institutions, programs, and fields of study that offer better (or worse) ways for college students to launch their careers and earn good wages.
While we have had general information on returns to majors for the past several years (documented above), for decades we have largely remained in the dark on the returns of graduates who have completed particular programs of study from specific postsecondary institutions.
Fortunately, thanks to years of data-collection efforts in eight states by College Measures,15 more detailed and comprehensive information is now available to better identify the value the labor market assigns to different degrees in different fields from different colleges. These program-level data can help identify general strategies that campuses and states can employ to improve the market value of the education they deliver—or at the very least make known to students the programs that deliver value to those who complete a credential.
In this analysis, we dig into this rich information on earnings and expected return on investment (ROI) for students completing bachelor’s, associate, certificate, and apprenticeship programs in specific fields of study from public institutions in Florida, Texas, and Tennessee. These data highlight patterns found in all the states with which College Measures has partnered and are consistent with less detailed national data reported by the Bureau of Labor Statistics and the American Community Survey (ACS).16
The following sections provide a snapshot of these data, emphasizing the host of educational pathways—not simply bachelor’s degree programs—that can help put students on paths toward economic success.
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