Beyond traditional academic degrees: The labor market returns to occupational credentials in the United States

Matthew D. Baird; Robert Bozick; Melanie A. Zaber

doi:10.2478/izajole-2022-0004

Figures & Tables

Average labor market outcomes by credential status and level of education.Note: Authors’ calculations from the CPS 2015 and 2016 (pooled). Certification refers to individuals with a certification but no license, while license refers to individuals with a license, whether or not they have a certification. Outcomes are not covariate-adjusted, but are weighted using CPS survey weights. CPS, current population survey.

MTEs of credential-holding for the probability of being employed, conditional on being in the labor force.Note: Shaded region represents 95% confidence interval from block-bootstrapping. Results come from estimating MTE model of the marginal impact of credentialing across distaste for treatment on the outcome of probability of being employed. MTEs, marginal treatment effects.

MTEs of occupational credential-holding for log wages, conditional on being employed.Note: Shaded region represents 95% confidence interval from block-bootstrapping. Results come from estimating MTE model of the marginal impact of credentialing across distaste for treatment on the outcome of probability of being employed. MTEs, marginal treatment effects.

Marginal treatment effects of occupational credential-holding for log wages, conditional on being employed. (A) Licenses and (B) Certifications.

Sample Characteristics, Sub-Baccalaureate

	Certification-holders	License-holders	Non-credential holders	All
IVs
Local peer group mean certification	0.028 (0.019)	NA	0.021 (0.017)	0.021 (0.017)
Local peer group mean license	NA	0.153 (0.058)	0.130 (0.059)	0.133 (0.059)
Selected Covariates
Local peer group mean wages	11.746 (3.929)	11.193 (3.755)	10.220 (3.808)	10.383 (3.823)
Local group mean wages	8.639 (1.181)	8.570 (1.155)	8.521 (1.152)	8.530 (1.153)
Local unemployment rate	0.050 (0.014)	0.050 (0.012)	0.051 (0.013)	0.050 (0.013)
Local labor force participation rate	0.832 (0.055)	0.832 (0.055)	0.827 (0.055)	0.828 (0.055)
Potential experience	25.162 (12.316)	26.130 (12.334)	26.484 (13.794)	26.410 (13.577)
Male	0.593 (0.491)	0.512 (0.500)	0.495 (0.500)	0.499 (0.500)
Married	0.571 (0.495)	0.589 (0.492)	0.502 (0.500)	0.515 (0.500)
Any dependents	0.380 (0.485)	0.377 (0.485)	0.311 (0.463)	0.321 (0.467)

N	5,863	40,689	250,618	297,170
Percent	2.00%	13.70%	84.30%	100%

Effects of credential-holding on log wages by gender and level of education

	License				Certification

	Sub-baccalaureate		At least bachelor's		Sub-baccalaureate		At least bachelor's

	No occupation or industry controls	Occupation and industry controls	No occupation or industry controls	Occupation and industry controls	No occupation or industry controls	Occupation and industry controls	No occupation or industry controls	Occupation and industry controls
Men
OLS	0.087^*** (0.005)	0.072^*** (0.005)	0.018^** (0.009)	0.027^*** (0.008)	0.145^*** (0.009)	0.087^*** (0.008)	0.081^*** (0.012)	0.052^*** (0.012)
ATT	0.353^*** (0.099)	0.073 (0.066)	−0.558^*** (0.113)	0.132 (0.091)	1.662^*** (0.183)	1.216^*** (0.144)	−1.105^*** (0.254)	−0.428^** (0.179)
ATE	0.131 (0.103)	0.166^* (0.097)	0.193 (0.122)	0.314^*** (0.114)	−0.615^** (0.258)	−0.419 (0.267)	0.542 (0.357)	0.886^*** (0.329)
LATE	0.271^*** (0.084)	0.089 (0.062)	−0.197^** (0.097)	0.174^** (0.087)	1.580^*** (0.191)	1.222^*** (0.153)	−0.916^*** (0.252)	−0.259 (0.178)
2SLS	0.049 (0.092)	0.103 (0.092)	−0.348^*** (0.110)	−0.193 (0.144)	0.579^*** (0.220)	0.479^** (0.205)	−0.525^* (0.277)	−0.997^*** (0.262)
ATUT	0.088 (0.119)	0.184^* (0.112)	0.489^*** (0.162)	0.386^** (0.152)	−0.695^*** (0.267)	−0.477^* (0.276)	0.644^* (0.377)	0.969^*** (0.349)

N	95,138	95,138	49,653	49,653	82,510	82,510	37,841	37,841
Mean	2.848	2.848	3.422	3.422	2.825	2.825	3.409	3.409

Women
OLS	0.096^*** (0.006)	0.064^*** (0.006)	0.128^*** (0.006)	0.092^*** (0.006)	0.119^*** (0.017)	0.087^*** (0.015)	0.121^*** (0.013)	0.079^*** (0.012)
ATT	0.025 (0.097)	0.440^*** (0.059)	−0.330^*** (0.096)	0.288^*** (0.087)	0.989^*** (0.240)	1.284^*** (0.164)	−1.174^*** (0.286)	0.128 (0.191)
ATE	−0.086 (0.100)	−0.739^*** (0.103)	−0.179^*** (0.063)	0.047 (0.059)	−0.030 (0.340)	−1.660^*** (0.353)	−0.210 (0.279)	−0.560^** (0.268)
LATE	−0.018 (0.077)	0.016 (0.055)	−0.212^*** (0.065)	0.099^* (0.058)	1.193^*** (0.287)	1.358^*** (0.207)	−1.104^*** (0.263)	−0.018 (0.177)
2SLS	−0.095 (0.086)	−0.124 (0.107)	−0.342^*** (0.074)	−0.542^*** (0.107)	−0.898^*** (0.301)	−0.836^*** (0.290)	0.025 (0.312)	−0.510^* (0.287)
ATUT	−0.110 (0.120)	−0.998^*** (0.129)	−0.075 (0.086)	−0.119 (0.086)	−0.057 (0.347)	−1.739^*** (0.362)	−0.153 (0.293)	−0.602^** (0.283)

N	82,681	82,681	54,933	54,933	69,718	69,718	34,421	34,421
Mean	2.657	2.657	3.237	3.237	2.633	2.633	3.174	3.174

Decomposed and total effects of credentials on hourly wages by level of education

		License			Certification

		Extensive	Intensive	Total	Extensive	Intensive	Total
Sub-baccalaureate	OLS	0.174^*** (0.037)	0.044 (0.044)	0.218^*** (0.062)	0.103^*** (0.038)	0.074 (0.066)	0.177^** (0.072)
	ATE	0.397^*** (0.152)	0.013 (0.069)	0.410^** (0.165)	0.608 (0.561)	−0.460^** (0.218)	0.145 (0.607)
	Mean			18.35			17.93

At least bachelors	OLS	0.267^*** (0.049)	0.003 (0.038)	0.269^*** (0.062)	0.101^* (0.058)	−0.016 (0.054)	0.085 (0.078)
	ATE	0.768^*** (0.277)	−0.003 (0.069)	0.765^*** (0.280)	2.944^** (1.146)	0.024 (0.178)	2.968^** (1.171)
	Mean			33.34			32.57

Comparison of log wage returns to associate degree using our IV to returns to certification and licenses for the sub-baccalaureate population

	License	Certification	Associate degree
OLS	0.095^*** (0.004)	0.138^*** (0.008)	0.164^*** (0.004)
ATT	0.422^*** (0.067)	1.889^*** (0.144)	0.121^*** (0.023)
ATE	0.260^*** (0.065)	0.232 (0.180)	0.251^*** (0.036)

N	182,381	182,381	182,381
Mean	2.764	2.764	2.764

Comparison of log wage returns to associate degree using our instrumental variable to returns to certification and licenses for the sub-baccalaureate population

	License	Certification	Associate degree
OLS	0.095^*** (0.004)	0.138^*** (0.008)	0.164^*** (0.004)
ATT	0.422^*** (0.067)	1.889^*** (0.144)	0.121^*** (0.023)
ATE	0.260^*** (0.065)	0.232 (0.180)	0.251^*** (0.036)
LATE	0.372^*** (0.060)	2.011^*** (0.159)	0.424^*** (0.030)
2SLS	0.383^*** (0.062)	1.785^*** (0.178)	1.250^*** (0.077)
ATUT	0.227^*** (0.073)	0.181 (0.184)	0.281^*** (0.043)

N	182,381	182,381	182,381
Mean	2.764	2.764	2.764

First-stage regressions predicting credential receipt

		License			Certifications

		No controls	Base controls	All controls	No controls	Base controls	All controls
Sub-baccalaureate	Coef.	0.798^***	0.659^***	0.425^***	0.489^***	0.239^***	0.198^***
	Std. Error	0.012	0.019	0.023	0.023	0.029	0.03
	F-stat.	5,504.5	1,982.7	192.6	802.2	353.4	45
	Mean	0.14	0.14	0.14	0.023	0.023	0.023
	N	291,307	291,307	291,307	256,481	256,481	256,481
Bachelor's degree or higher	Coef.	0.810^***	0.615^***	0.422^***	0.404^***	0.232^***	0.207^***
	Std. Error	0.021	0.024	0.026	0.03	0.036	0.036
	F-stat.	3,160.8	646.5	199.4	227.1	49.4	21.2
	Mean	0.322	0.322	0.322	0.051	0.051	0.051
	N	141,130	141,130	141,130	100,819	100,819	100,819

Effects of credential-holding on log wages by level of education

	License				Certification

	Sub-baccalaureate		At least bachelor's		Sub-baccalaureate		At least bachelor's

	No occupation or industry controls	Occupation and industry controls	No occupation or industry controls	Occupation and industry controls	No occupation or industry controls	Occupation and industry controls	No occupation or industry controls	Occupation and industry controls
OLS	0.095^*** (0.004)	0.072^*** (0.004)	0.079^*** (0.006)	0.063^*** (0.005)	0.138^*** (0.008)	0.090^*** (0.008)	0.099^*** (0.008)	0.063^*** (0.008)
ATT	0.422^*** (0.067)	0.329^*** (0.045)	−0.539^*** (0.070)	0.121^* (0.066)	1.889^*** (0.144)	1.435^*** (0.108)	−1.146^*** (0.191)	−0.287^** (0.129)
ATE	0.260^*** (0.065)	0.069 (0.063)	−0.192^*** (0.054)	0.080 (0.062)	0.232 (0.180)	0.095 (0.180)	0.152 (0.211)	0.049 (0.196)
LATE	0.372^*** (0.060)	0.241^*** (0.046)	−0.334^*** (0.052)	0.067 (0.055)	2.011^*** (0.159)	1.583^*** (0.125)	−1.003^*** (0.178)	−0.257^** (0.122)
2SLS	0.383^*** (0.062)	0.453^*** (0.068)	−0.489^*** (0.059)	−0.644^*** (0.086)	1.785^*** (0.178)	1.511^*** (0.172)	−0.147 (0.204)	−0.424^** (0.187)
ATUT	0.227^*** (0.073)	0.015 (0.072)	−0.006 (0.075)	0.057 (0.086)	0.181 (0.184)	0.053 (0.185)	0.231 (0.222)	0.069 (0.206)

N	177,819	177,819	104,586	104,586	152,228	152,228	72,261	72,261
Mean	2.759	2.759	3.325	3.325	2.737	2.737	3.297	3.29

Effects of credential-holding on employment by gender and level of education

	License		Certification

	Sub-bac	BA+	Sub-bac	BA+
Men
OLS	0.019^*** (0.002)	0.011^*** (0.002)	0.011^*** (0.004)	0.003 (0.003)
ATT	−0.126^*** (0.032)	0.048 (0.031)	−0.426^*** (0.083)	0.061 (0.066)
ATE	0.025 (0.027)	0.018 (0.019)	0.078 (0.071)	0.234^*** (0.082)
LATE	−0.070^*** (0.025)	0.029 (0.022)	−0.429^*** (0.085)	0.110^* (0.064)
2SLS	−0.000 (0.030)	0.020 (0.024)	−0.301^*** (0.101)	−0.049 (0.065)
ATUT	0.056^* (0.032)	0.006 (0.022)	0.095 (0.073)	0.244^*** (0.087)

N	115,193	58,417	98,991	43,804
Mean	0.943	0.977	0.938	0.973

Women
OLS	0.022^*** (0.002)	0.013^*** (0.001)	0.011^** (0.005)	0.005 (0.003)
ATT	0.267^*** (0.042)	0.031 (0.025)	−0.295^*** (0.098)	0.246^*** (0.080)
ATE	0.149^*** (0.031)	0.039^** (0.015)	0.372^*** (0.122)	0.022 (0.060)
LATE	0.242^*** (0.033)	0.038^** (0.016)	−0.304^*** (0.116)	0.252^*** (0.071)
2SLS	0.235^*** (0.035)	0.033^* (0.018)	−0.434^*** (0.128)	0.501^*** (0.081)
ATUT	0.123^*** (0.037)	0.044^** (0.019)	0.390^*** (0.125)	0.009 (0.064)

N	94,813	61,597	79,628	39,050
Mean	0.945	0.976	0.940	0.970

Sample Characteristics, Bachelor's Degree or More

	Certification-holders	License-holders	Non-credential holders	All
Instrumental variables
Local peer group mean certification	0.054 (0.027)	NA	0.048 (0.026)	0.049 (0.026)
Local peer group mean license	NA	0.335 (0.085)	0.308 (0.084)	0.317 (0.085)
Selected Covariates
Local peer group mean wages	23.887 (6.748)	22.261 (6.402)	23.190 (6.699)	22.926 (6.626)
Local group mean wages	21.480 (3.432)	20.721 (3.403)	21.355 (3.515)	21.163 (3.491)
Local unemployment rate	0.048 (0.011)	0.049 (0.011)	0.049 (0.011)	0.049 (0.011)
Local labor force participation rate	0.842 (0.051)	0.838 (0.053)	0.838 (0.051)	0.838 (0.052)
Potential experience	22.708 (11.145)	23.136 (11.548)	22.088 (12.294)	22.435 (12.038)
Male	0.522 (0.500)	0.397 (0.489)	0.484 (0.500)	0.458 (0.498)
Married	0.673 (0.469)	0.698 (0.459)	0.625 (0.484)	0.649 (0.477)
Any dependents	0.421 (0.494)	0.421 (0.494)	0.360 (0.480)	0.381 (0.486)

N	5,098	45,408	95,722	146,228
Percent	3.50%	31.10%	65.50%	100%

Effects of credential-holding on employment by level of education

	License		Certification

	Sub-baccalaureate	Bachelor's or higher	Sub-baccalaureate	Bachelor's or higher
OLS	0.020^*** (0.001)	0.012^*** (0.001)	0.011^*** (0.003)	0.004^* (0.002)
ATT	−0.012 (0.023)	0.044^** (0.018)	−0.450^*** (0.062)	0.134^*** (0.045)
ATE	0.149^*** (0.031)	0.039^** (0.015)	0.372^*** (0.122)	0.022 (0.060)
LATE	0.017 (0.018)	0.036^*** (0.012)	−0.469^*** (0.067)	0.152^*** (0.041)
2SLS	0.053^** (0.021)	0.030^** (0.014)	−0.359^*** (0.077)	0.194^*** (0.045)
ATUT	0.058^*** (0.019)	0.028^** (0.013)	0.082 (0.055)	0.121^** (0.053)

N	210,006	120,014	178,619	82,854
Mean	0.944	0.976	0.939	0.972

Beyond traditional academic degrees: The labor market returns to occupational credentials in the United States

Figures & Tables

Figure 1

Figure 2

Figure 3

Figure A1

Sample Characteristics, Sub-Baccalaureate

Effects of credential-holding on log wages by gender and level of education

Decomposed and total effects of credentials on hourly wages by level of education

Comparison of log wage returns to associate degree using our IV to returns to certification and licenses for the sub-baccalaureate population

Comparison of log wage returns to associate degree using our instrumental variable to returns to certification and licenses for the sub-baccalaureate population

First-stage regressions predicting credential receipt

Effects of credential-holding on log wages by level of education

Effects of credential-holding on employment by gender and level of education

Sample Characteristics, Bachelor's Degree or More

Effects of credential-holding on employment by level of education

Paradigm

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