Credentials

Last Updated: Spring 2023

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There is a substantial and growing research literature on credentialing, especially related to alternative or non-degree credentials such as microcredentials, badging, and industry certifications. Research continues to focus on traditional credentials such as degrees and certificates, especially on their economic value and contributions to social mobility. Many studies focus on the differential economic returns of diverse credentials for different populations.

See Research for a list of organizations that conduct research and evaluation studies.

Examples

The Inter-American Development Bank and Workcred collaborated on A World of Transformation: Moving from Degrees to Skills-Based Alternative Credentials. This report summarizes evidence suggesting a decrease in the value of degrees as a signaling mechanism in the labor market. It also identifies the benefits of non-degree credentials and makes recommendations on ways to increase their value and acceptance in the market. It concludes that it remains to be seen whether non-degree credentials are a short-term strategy to close skills gaps and deal with the transition to adaptive and qualified labor, or a permanent strategy of human capital development.

Workcred (research affiliate of the American National Standards Institute) focused on industry certifications in Certifications: The Ideal, Reality, and Potential.  Among workforce credentials, certifications stand out for their accuracy in signaling the skills of the certification holder, their accessibility to people with varying levels of education and experience, and their ability to motivate skill acquisition through recertification requirements. Yet, certifications are still not as widely known or understood as other credentials. The report offers policy and operational recommendations to increase the use of certifications and better integrate them into U.S. education and training systems. It also highlights areas in further need of research.

In The College Payoff: More Education Doesn’t Always Mean More Earnings, the Georgetown University Center on Education and the Workforce explores how lifetime earnings vary by education level, field of study, occupation, industry, gender, race and ethnicity, and location. The lifetime earnings of a full-time worker with a high school diploma are $1.6 million, while workers with an associate degree earn $2 million. However, at least one-fourth of high school graduates earn more than an associate degree holder. Bachelor’s degree holders earn a median of $2.8 million during their careers, 75 percent more than if they had only a high school diploma. Master’s degree holders earn a median of $3.2 million over their lifetimes, while doctoral degree holders earn $4 million and professional degree holders earn $4.7 million. However, one-fourth of workers with a bachelor’s degree earn more than half of workers with a master’s or a doctoral degree.

In The Overlooked Value of Certificates And Associate's Degrees: What Students Need to Know Before They Go to College, the Georgetown University Center on Education and the Workforce examines the labor market value of associate degrees and certificate programs. It finds that field of study especially influences future earnings for graduates of these programs since they are tightly linked with specific occupations. It also reveals that the combined number of certificates and associate degrees awarded by colleges is similar to the number of bachelor’s degrees awarded—around 2 million per year—with certificates and associate degrees each accounting for about 1 million. About half of postsecondary students taking undergraduate coursework are enrolled in certificate and associate degree programs. Associate degrees include a mix of general education and career preparation, while certificates are almost exclusively career-oriented. Workers with associate degrees in engineering have median earnings that are about twice that of those with associate degrees in education or the arts. Workers with certificates in engineering technologies have median earnings that outpace earnings for those with certificates in cosmetology and education. Also, students enrolled in certificate and associate degree programs are more diverse by race and ethnicity, socioeconomic status, and age than those in bachelor’s degree programs. 

In The Most Popular Degree Pays Off: Ranking the Economic Value of 5,500 Business Programs at More Than 1,700 Colleges, the Georgetown University Center on Education and the Workforce finds that the economic value of business programs is high compared to the financial returns from other programs—though not as high as returns associated with programs in health, engineering, or computer and information sciences. While graduates’ earnings and federal student loan debt vary by institution and degree level, the majority of business programs lead to median earnings that are roughly 10 times graduates’ debt payments two years after program completion. Two years after graduation, associate degree holders in business have median annual earnings of $30,000 after debt payments. The financial returns from a business degree rise to $43,200 after debt payments for bachelor’s degree holders and $51,600 for master’s degree holders.

The National Research Collaborative on Competency-Based Education and Learning (CBE), hosted by the American Institutes for Research (AIR), produced a series of “explainers” that provide brief summaries of the existing research on CBE. This series is intended to be useful for practitioners, program leaders, and researchers—those already working in CBE and those interested in pursuing work in this area. The series focused on:

  • Foundational knowledge: What we know about the landscape, quality, and benefits of CBE programs.
  • Design and implementation: What we know about CBE program design, workforce alignment, and cost.
  • Public perceptions: How a broad range of stakeholders (including employers, potential students, policymakers, and providers), think about CBE, what policies at the state and federal levels impact the development and implementation of CBE programs, and what the implications are of current policies or policies under consideration.

In addition, the series provides a summary of resources available for advancing research in CBE and supporting quality research-based efforts to implement or improve CBE programs.

Counting U.S. Postsecondary And Secondary Credentials Report, the fourth report on credentials available in the U.S., was issued by Credential Engine in fall 2022. The report identifies 1,076,358 unique credentials in the U.S. in 18 detailed credential categories across four broad types of credential providers:

  • Postsecondary Educational Institutions— 350,412 degrees and certificates
  • Massive Open Online Course (MOOC) Providers—13,014 course completion certificates, micro-credentials, and online degrees from foreign universities
  • Non-academic providers—656,505 badges, course completion certificates, licenses, certifications, and apprenticeships
  • Secondary Schools—56,179 diplomas from public and private secondary schools, alternative certificates from secondary schools, and high school equivalency diplomas

Two new credential categories were added at the secondary level: alternative high school completion certificates and high school equivalency awards for individuals completing a set of requirements or passing tests that do not require graduating from high school with a full diploma. This is the first time the report has recognized these alternative credentialing outcomes resulting from a high school education.

New in this report is the number of credential providers associated with each of four broad types of providers— postsecondary educational institutions, MOOC providers, non-academic providers, and secondary schools—as well as for each of the 18 credential categories.

As in prior years, this report demonstrates the nation’s need to dramatically improve transparency in the credential marketplace to promote economic growth and individual mobility. Needed is more information about how credentialing practices overlap, including how certificates offered by institutions of higher education stack to further certificates and degrees, as well as how badges are utilized to represent these and other credentials.  More information is needed regarding the content of different credentialing programs to properly categorize and understand them, such as the competencies they aim to highlight, the time they require to complete, and their relative value in the marketplace

What We Know About Non-Degree Credentials: A Literature Scan A project of the Non-Degree Credentials Research Network at the George Washington Institute of Public Policy, The George Washington University, summarizes what we know about the following questions:

  • How prevalent are non-degree credentials in the U.S. workforce? 
  • Who benefits from non-degree credentials in terms of labor market outcomes, and to what extent?
  • Why have non-degree credentials proliferated in recent years?
  • How do employers perceive and use non-degree credentials? 
  • What motivates individuals to pursue non-degree credentials?

The Non-degree Credentials Research Network’s New Directions for Non-degree Credentialing Research - Stakeholder Summary discusses promising insights from research and describes the 15 most pressing research questions that should be addressed. These include questions about who benefits from different types of credentials, how to identify high-quality credentials, how employers are using credentials, and how policymakers can improve the value of non-degree credentials for all parties in the credentialing marketplace.

The National Student Clearinghouse conducted a pilot project—Industry Certification Education and Performance Data System initiative—with the U.S. Census Bureau, the National Association of Manufacturers (NAM)/Manufacturing Institute (MI) and their national manufacturing organization partners. The purpose of the project was to study how data about industry credential attainment could be matched with and incorporated into the enrollment and degree information that the Clearinghouse collects. That date would then be matched against Census Bureau data to produce preliminary aggregate labor market outcomes. The data shows that most of the people who earn a manufacturing credential from the National Institute for Metalworking Skills (NIMS) or the Manufacturing Skill Standards Council (MSSC) are earning those credentials in the noncredit environment, rather than in high school or on the manufacturing floor. In addition, preliminary data showed an immediate increase in wages and the year-over-year increase in wages after the attainment of the last credential. When the data was broken down by age, it revealed additional points of interest: 

  • People ages 18-25 see an immediate upward wage trajectory for five years after receiving their credential. 
  • Between ages 26 and 45, wages are stagnant before earning a credential, then rise steadily for five years after earning the credential. 
  • People older than 45 who are earning a manufacturing credential are able to replace wages that they lost before they attained that credential.

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