Economic Returns from Obtaining KCTCS Certificates and Diplomas

Economic Returns from Obtaining KCTCS Certificates and Diplomas Christopher Jepsen and Kenneth Troske Center for Business and Economic Research, University of Kentucky The income distribution in the United States has widened over the last few decades. The economic returns for high school graduates have declined substantially and job opportunities for less-skilled workers are becoming more limited. In response, the Kentucky Community and Technical College System (KCTCS) offers several postsecondary outcomes including certificates and diplomas. Blomquist et al. (2007) examined short-run labor market returns for degrees, diplomas, and certificates. The goal of this proposal is to provide a detailed analysis of the economic returns of diplomas and certificates, including an analysis of the pathways through which these returns are achieved. Our analysis of labor-market returns will extend the work on private returns in Blomquist et al. (2007). That report studied one cohort of students, matching them with earnings data through the fourth quarter of2006. We propose to study an additional cohort of students, and to study earnings through 2008 (once the data are available). The extension of the time period will dramatically extend the post-schooling time period for the cohort of students who entered KCTCS during the 2002-2003 academic year, the cohort of students originally studied in Blomquist et al. (2007). That report used earnings data for 3.5 to 4.5 years after they entered KCTCS. By extending the data through 2008, we would have 5.5 to 6.5 years of data. For the cohort of students who entered KCTCS during the 2003-2004 academic year, we would have 4.5 to 5.5 years of earnings data after the students entered KCTCS. Adding an additional cohort would roughly double the sample size, thereby providing more accurate estimates of labor-market returns, particularly for analyses of subgroups with small populations such as diploma and certificate holders in specific fields of study. As noted above, one of the goals of the project is to study the pathways through which KCTCS diploma and certificate recipients increase their earnings. One pathway we will study is the role of job mobility in eXplaining earnings gains between diploma and certificate recipients and individuals who attend KCTCS but receive no degree, I diploma or certificate. Research has shown that women in general increase their earnings by advancing within firms rather than by switching firms, whereas men exhibit the reverse pattern. We will investigate whether this pattern holds for our two cohorts of KCTCS students. Because many female high school graduates are in jobs with little possibility for advancements, they may need to switch jobs in order to achieve higher earnmgs. Another pathway for increased labor-market returns is further post-secondary education. We will investigate the extent to which completion of a certificate or diploma leads to further post-secondary education. Students who receive a certificate or diploma have demonstrated the ability to successfully complete a set of courses and achieve a goal, potentially giving the self-confidence to pursue additional educational goals. We will look separately at further enrollment at KCTCS, as well as four-year institutions. National Student Clearinghouse data provide enrollment information that is regularly updated, so we can look at the decision to transfer to a four-year institution as well as the duration of attendance. This proposal will provide extensive information on the labor-market returns to the completion of a diploma or certificate at KCTCS. It will consider the direct impacts of diplomas and certificates on earnings, as well as the indirect effects through job mobility and additional post-secondary education.