Noncredit Research Collaborative

Noncredit Workforce Training, Industry Credentials, and Labor Market Outcomes

Abstract

Many public workforce training programs lead to industry-recognized, third-party awarded credentials, but little research has been conducted on the economic benefits of these credentials in the labor market. This paper provides quasi-experimental evidence on the labor market returns to industry-recognized credentials connected to community college workforce noncredit training programs. Based on novel data that includes approximately 24,000 working-age adults enrolled in noncredit workforce training programs at the Virginia Community College System, we employ a comparative individual-level fixed effects model to estimate earnings premia net of fixed attributes and earnings time-trends. Our results indicate that earning an industry-recognized credential, on average, increases quarterly earnings by approximately $1,000 and the probability of being employed by 2.4 percentage points, although there is substantial heterogeneity in economic return across different program fields. Back-of-the-envelope calculations suggest that the earnings gains associated with the industry credential obtained through the noncredit workforce training would exceed program costs in just over half a year on average.