Educational Pathways and Employment Outcomes of Community College Students

Summary

Community colleges serve those whose labor market productivity is critical to national economic progress: first-generation college students, displaced workers, minority students, and low-income students. Yet we know relatively little about employment outcomes for students who leave these schools. Do community colleges provide the skills required to succeed in the workforce? Are the returns higher for some programs and courses than others? Do students benefit equally from each credit they earn, or does completing a degree or certificate provide an extra boost to earnings? Do students who receive initial education and training in specific occupations come back for further education to enhance their career pathways?

Research Objectives / Goals / Questions

The Education Policy Initiative contributes to a major research project led by The Center for Analysis of Postsecondary Education and Employment (CAPSEE), which conducts research in Florida, Michigan, North Carolina, Ohio, and Virginia in order to better understand the employment and earnings benefits associated with a broad range of postsecondary education pathways, including those at the sub-baccalaureate level. CAPSEE also seeks to identify policies that improve completion rates along educational pathways leading to strong economic returns.

Empirical Strategy: Compare educational and employment outcomes for students who enroll in different community college degree courses and programs. We will use multiple regression, propensity score methodology, and fixed effects to control for differences between students that could bias our estimates. In estimating earnings effects for experienced workers, we can control for previous earnings trajectories. In estimating earnings and educational outcomes for those who have graduated from Michigan high schools since 2002, we can control for academic preparation (as measured by test scores in high school), family background (as measured by free lunch status in high school), and childhood neighborhood (as captured by high school ID).

How is the Study Funded?

The CAPSEE Center was established through a grant from the Institute of Education Sciences of the U.S. Department of Education. The University of Michigan team receives funding through our partners at CAPSEE.

Partners

Michigan is one of the few states lacking any form of post-secondary governing authority. As a result, there is no statewide post-secondary database. There is an effort underway to establish such a database. The project will therefore play a major role in moving forward the development of a statewide database that will allow the state to track students from the elementary/secondary sector into college and beyond. The pilot will be watched closely in Michigan and have an important impact upon the development of state education policy.

Who is on the Project Team?

Susan Dynarski, co-principal investigator
Brian Jacob, co-principal investigator
Peter Bahr, co-principal investigator

Daniel Kreisman is an Assistant Professor of Economics at Georgia State University. Kreisman previously served as postdoctoral research fellow with the Ford School's Education Policy Initiative. His research addresses topics in labor economics, education finance and education policy, including: vocational education, K-12 funding, student loans, community colleges, and labor market discrimination. His research has been published by The Review of Economics and Statistics and the Brookings Institution and has been cited in the New York Times and the Wall Street Journal. He has received grant and fellowship awards from the Institute for Research on Poverty, the American Education Research Association and the Institute of Education Sciences. He has a PhD in public policy from the University of Chicago and a BA in history and philosophy from Tulane University. Before graduate school, Dan taught high school English in New Orleans.

Mark Wiederspan is an assistant professor of higher and postsecondary education at Arizona State University's Mary Lou Fulton Teachers College. His areas of research include higher education policy, with a focus on financial aid; economics of education; educational pathways to college; and program evaluation. Wiederspan earned his PhD and MA in higher education administration from the University of Michigan's Center for the Study of Higher and Postsecondary Education. He earned a BA in political science from Nebraska Wesleyan University. Prior to graduate school, Mark worked as a policy analyst for the National Student Loan Program in Lincoln, NE.

Publications

Labor Market Returns to Community College Awards: Evidence From Michigan

Authors: Peter Riley Bahr, Susan Dynarski, Brian Jacob, Daniel Kreisman, Alfredo Sosa, & Mark Wiederspan

Abstract

This paper examines the relative labor market gains experienced by first-time college students who enrolled in five community colleges in Michigan in 2003 and 2004. We track credentials, credits, earnings, and employment for these students through 2011. We compare labor market outcomes of those who earned a credential (associate degree or certificate) to those who enrolled but did not earn a credential. The data sources consist of administrative records data from the colleges, unemployment insurance (UI) earnings data from the State of Michigan, and enrollment and graduation data from the National Student Clearinghouse. Our analytic sample consists of 20,581 students.

We find that students who were awarded a long-term certificate (referred to as a “diploma” in some states, including North Carolina) earned $2,500 to $3,600 more per year than those without a credential, with the larger returns concentrated among men. For associate degrees, the estimated returns were $9,400 for women and $5,600 for men. Women saw little gain when awarded a short-term certificate, while men gained $5,200 per year. Estimated returns were highest in health-related and technical fields.

[Download the EPI working paper]

The Effect of Labor Market Information on Community College Students’ Major Choice

Rachel Baker, Eric Bettinger, Brian Jacob and Ioana Marinescu (2018). “The Effect of Labor Market Information on Community College Students’ Major Choice,” Economics of Education Review. 65(August): 18-30.

Abstract

An important goal of community colleges is to prepare students for the labor market. But are students aware of the labor market outcomes in different majors? And how much do students weigh labor market outcomes when choosing a major? In this study we find that less than 15% of a sample of community college students in California rank broad categories of majors accurately in terms of labor market outcomes. Students believe that salaries are 13% higher than they actually are, on average, and students underestimate the probability of being employed by almost 25%. We find that the main determinants of major choice are beliefs about course enjoyment and grades, but expected labor market outcomes also matter. Experimental estimates of the impact of expected labor market outcomes are larger than OLS estimates and show that a 10% increase in salary is associated with a 14 to 18% increase in the probability of choosing a specific category of majors.

[Access the journal article]