The Economic Benefits of Pre-baccalaureate College: What We Can
Learn From W. Norton Grubb?
RESEARCH TO PRACTICE BRIEF
Issue 7 – January/February 2006
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Introduction
While postsecondary education can have a variety of important
benefits, it seems intuitive that any amount of education should improve
the economic well-being of adult learners. This does not
turn out to be the case. Two companion articles by Professor
W. Norton Grubb, of the University of California at Berkeley,
demonstrate that this view of human capital does
not hold up under careful scrutiny for pre-baccalaureate
education. Grubb’s analysis focuses on the economic
benefits from community college education by examining research
on national data sets (Part I) and several state
and local studies (Part II). This Research to Practice
Brief covers some of the key points of his investigation,
information that may be especially helpful for counselors
in their work with adult students considering college.
There are two important considerations to keep in mind in looking
at the trends discussed here. First, this analysis takes a national
perspective that smoothes out variations and contradictions from
study to study, college to college, and state to state. Second,
the analysis does not take into account whether the students
begin with a high school diploma or a GED, or other type of non-traditional
diploma (Tyler, 2002).
What is pre-baccalaureate education?
The term, pre-baccalaureate education, covers a wide
variety of educational experiences, from as little as one college
course to completion of an associate degree. While Grubb notes
that several of the highest growth occupations require an associate
degree (e.g., computer support specialist, legal assistant, medical
records technician, physical therapist), dropout rates are very
high in this sector of education so it is important that students
understand the impact of leaving college without a credential.
To truly understand this educational sector, it is important
to disaggregate the data by levels
of education completed:
- Completion of 12 credits or less. This is
a category used by many community colleges to divide “casual
students” from “serious students,” yet
many students never reach 12 credits. Twelve credits or less
generally brings zero or insignificant economic returns (less
than 5% increase in earnings), especially for academic
credits or when students “mill around” and
do not focus on a specific program of study. The benefits
of small amounts of credit are more likely to accrue to those
students who astutely chose courses that maximize their immediate
employment needs.
- Certificates. These are generally 1-year
programs recognized by the state that focus on occupational
preparation without the academic or general education content
of the associate degree. Few data sets include this credential
and research on its benefit is conflicting. “Given
the apparent increase in these credentials, this [lack of
research] is a potentially serious problem… (p.306).
- Associate degree (On average, taking adult
students more than five years to complete rather than two
years.) This credential provides a statistically significant
economic return, with women standing to gain even more than
men. While not as dramatic as a baccalaureate degree, an “associate
degree generally enhances wages, employment, and earnings
by significant amounts with men earning 18% more and women
earning 23% more than high school graduates” (p. 306).
In so far as an academic degree is the connection to a baccalaureate
degree, students do benefit if they transfer and complete
a baccalaureate – a credential with well-known economic
benefits. Students who do not complete find they have spent time
and money without getting the benefits of increased earnings.
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“The take-home message is: credential programs
are better than non-credential programs; longer programs
are better than shorter; and, students need to worry
if certificates have any established LOCAL market
value.” W. Norton Grubb
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What are the implications for the pre-baccalaureate job
market?
Education is just part of the picture. The economic benefits
of a credential plus finding related employment are
much higher, especially for women, than for students with the
credential but unrelated employment. So, students need to earn
a credential, in the right occupational area, and find employment
in that field. Students who complete a credential but end up
in unrelated employment may experience little economic benefit
from their education.
Table 1. Understanding the Pre-baccalaureate Employment
Market.
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The Pre-baccalaureate job market is…
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Implications
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LOCAL
- Employers look locally to fill positions for
occupations requiring less than a baccalaureate.
- Two-year colleges market to local employers.
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Benefits of pre-baccalaureate education are geographically
bound– if students fail to find local employment
in their field of study, moving to another location
may not increase opportunities because employers
hire from their own local programs.
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INFORMAL
- Hiring is highly informal with specific experience
often preferred to formal schooling.
- Preparation in military, on the job, and through
hobbies may be as valuable as formal schooling.
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Formal schooling is less likely to be an absolute
requirement. Resumes should reflect the student’s
full range of experience related to type of skills
required by a particular job.
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LESS STABLE
- More likely to undergo cycles of unemployment
than jobs requiring baccalaureate level schooling
but more stable than those requiring only a high
school diploma.
- Employers are more likely to lay off less-educated
workers or those without company-specific training.
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Investigation of an occupational field should include
job stability and patterns of unemployment along
with availability of work. Once in the job, students
should take advantage of opportunities in which the
employer invests in training.
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Adapted from Grubb, W.N. (2002). Learning and earning in the middle,
part I: National studies of pre-baccalaureate education. Economics
of Education Review, 21, pp. 302.
How do the economic benefits differ by race, age, and
gender?
- Race. Although there are few studies that
compare the advantages of completing an associate degree
by race, attending community college but not completing or completing
an associate degree are both statistically more beneficial
to black men and women compared to whites. Blacks (and Latino)
students are less likely to complete the associate degree,
however, and “therefore the slightly higher returns
for blacks are undermined by low completion rates” (p.
312).
- Age. Older students (after age 30) tended
to experience a decline in earnings prior to entering college
and regain little through basic or remedial education or
humanities course work. Over time, however, they appear to
reap the same benefits as younger students. Displaced workers
taking health-related, science, math, trades and repair (e.g.,
air conditioning service) credits were found to have a substantial
positive return on their education.
- Gender. Grubb found that economic “returns
are particularly high for associate degrees in health occupations,
in technical fields for men, and in ‘other’ fields
(like communications and design) for women; the returns are
negative though insignificant for agriculture, marketing
(i.e., retail sales), and education for men” (p. 313).
Gender segregation is high in this sector of postsecondary
education with some interesting results. Women in business
certificate programs may end up in lower paying positions,
such as data-entry clerk or secretary yet an associate degree
in business has positive returns. Also, women may find that
they reap greater economic benefits by moving into non-traditional
occupations (i.e., engineering and computer fields) rather
than more traditional occupations, such as education.
What can Transition Counselors do?
While there are many benefits to postsecondary education (such
as personal satisfaction and growth; increased health and
well-being, etc.), the vast majority of students see postsecondary
education as essential to finding a better job. Unfortunately,
counselors and teachers in transition programs find that
personal and academic counseling, rather than career counseling,
consumes most of their time. Dr. Grubb’s work points
out, however, that careful career planning and counseling
AND understanding how specific forms of education connect
with local employers, can have a significant positive, long-term
impact on the student’s economic well-being. To make
your career counseling more effective:
- Investigate resources that establish the local market
value of college programs and credentials (especially
certificates). Some resources for this include
the college’s Career Services Office, faculty or
staff coordinating specific occupational programs, career
workshops at your local Economic
Opportunity Center and your State
Gateway to Career OneStop services.
- Develop career exploration activities that
require students to create a detailed analysis of career
pathways of interest to them.
- Feature guest presenters especially employed
graduates from the community college occupational programs.
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“Education in a community college is necessary
but not sufficient for all this to pay off. The student
needs to earn a credential, in the right occupational
area, AND find related employment for all this to
payoff.” W. Norton Grubb
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A Special Thank You: Dr. Grubb graciously gave
of his time to help the NCTN condense his important investigation
in pre-baccalaureate education.
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Key Definitions
Human capital – consists
of assets that cannot be separated from the person – their
knowledge, skills, level of health, etc. In this
brief, we are referring to the returns on investment
to different amounts of pre-baccalaureate education
and investing in education for the economic benefits it
will generate in the future.
Credential – a
document representing competency or completion of
a specific course of study. High school diplomas,
the baccalaureate degree, and various professional
degrees are the most familiar and heavily researched
credentials.
Disaggregate the data – to
separate a set of information into its component
parts. For example, Grubb notes that by looking closely
at the field of study students choose, we see that
are some fields are more economically beneficial
for women than men.
Academic credits – Those
college credits not exclusively connected to a vocational
pathway but connected to transfer to 4-year institutions
and more closely representing the first 2 years of
a 4-year baccalaureate degree.
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References
Grubb, W. Norton (2002). Learning and earning in the middle,
part I: National studies of pre-baccalaureate education. Economics
of Education Review, 21, 299-321.
Grubb, W. Norton (2002). Learning and earning in the middle, part
I: State and local studies of pre-baccalaureate education. Economics
of Education Review, 21, 401-414.
Tyler, John N. (2002). The Economic Benefits of the GED: Lessons
from Recent Research. Brown University and National
Bureau of Economic Research. Downloaded on May 23, 2005 from http://www.brown.edu/Departments/
Education/facpages/j_tyler/pdfs/papers/
GED%20Synthesis%20paper-%20Tyler.pdf.
We are interested in hearing from you. If you would like to give
us feedback on this brief, please email Cynthia Zafft (czafft@worlded.org),
Coordinator of the National College Transition Network at World
Education, Inc.
W. Norton Grubb is Professor and David Gardner
Chair in Higher Education in the Graduate School of Education,
University of California at Berkeley.
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