Key Points
- With over 1.1 million credentials available but only 12 percent delivering significant wage gains, learners face a chaotic marketplace that lacks effective oversight.
- Top-decile credentials yield annual wage gains of nearly $5,000 and significantly increase career-switching success and advancement opportunities, while bottom-tier credentials provide few or no benefits.
- New data analytics enable objective measurement of credential outcomes across wages, career mobility, and promotion metrics.
- Public funding for credentials must be tied to empirical evidence of labor market value to protect learners and taxpayer investments.
Introduction
Amid escalating college costs, mounting student debt, and rising college graduate underemployment, students of all backgrounds increasingly question college as a path to economic mobility. This shift has sparked interest in alternatives to college—from high school career and technical education (CTE) programs to short-term adult training courses proposed for Pell Grant funding expansion. These credentials offer attractive advantages: rapid skill acquisition, flexibility for learners juggling work or family commitments, and promising pathways for adults seeking to reenter or advance in the workforce.
Yet while the potential is significant, so is the risk of wasting learners’ time and taxpayer dollars on credentials that don’t pay off.
This risk is exacerbated by today’s chaotic credentialing marketplace where over 1.1 million different credentials are now on offer—but with minimal oversight to separate value from empty promises.1 We show below a severely skewed distribution of credential value: Only about 12 percent of credentials deliver significant wage gains that earners wouldn’t have otherwise gotten, and just 18 percent of credential earners are likely to see wage increases their peers don’t enjoy.
The right credentials can be transformative. Compared to bottom-tier options, credentials in the top decile yield annual wage gains of nearly $5,000, increase career switching success sixfold, and boost the probability of promotion in the earner’s current field 17-fold. These outcomes serve as proof that well-designed programs can open doors to life-changing opportunities.
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