Vocational Degrees That Pay Off

Some one-year certificates lead to double-digit wage gains, and some don’t.

How much extra a student will earn annually by finishing a vocational degree in a field, compared with a similar student who didn’t finish. Source: NBER Working Paper, Career Technical Education and Labor Market Outcomes, Table 2.

A four-year college degree isn’t for everyone. Especially for students who never liked school. The conventional advice for these folks is to master a technical skill in order to have a career more rewarding than serving fast food. Increasingly, many choose to go back to school and get a vocational certification or a degree. But, is there any evidence that this sort of job training pays off?

A new California study concludes that in some fields, especially healthcare, the answer is yes. In other fields, not so much. The working paper, “Career Technical Education and Labor Market Outcomes: Evidence from California Community Colleges,” was published online by the National Bureau of Economic Research (NBER) in April, 2015.

Accounting; Banking and Finance; Business Administration; Business Management; International Business and Trade; Marketing and Distribution; Logistics and Materials Transportation; Real Estate; Insurance; Office Technology/Office Computer Applications; Labor and Industrial Relations; Customer Service

Information Technology

Computer Information Systems; Computer Programming; Computer Systems Analysis; Computer Software Development; Computer Infrastructure and Support; World Wide Web Administration

Engineering Technology

Drafting and Design Technology; Radiation Technology (Non-Medical); Electronics and Electric Technology; Printing and Lithography; Tool and Machine Design Technology; Instrumentation Technology; Industrial Systems Technology and Maintenance; Environmental Control Technology (HVAC); Diesel Technology; Auto repair; Aeronautical and Aviation Technology; Construction Crafts Technology; Drafting; Chemical Technology; Laboratory Science Technology; Manufacturing and Industrial Technology; Civil and Construction Management Technology; Water and Wastewater Technology; Marine Technology; Optics; Musical Instrument Repair

Health

Hospital and Health Care Administration; Nursing, R.N.; Dental Technician; Medical Laboratory Technology; Physicians Assistant; Electro-Diagnostic Technology; Medical Assisting; Hospital Central Service Technician; Respiratory Care/Therapy; Polysomnography; Electro-Neurodiagnostic Technology; Cardiovascular Technician; Orthopedic Assistant; Electrocardiography; Podiatry; Surgical Technician; Occupational Therapy Technology; Optical Technology; Speech/Language Pathology and Audiology; Pharmacy; Physical Therapist Assistant; Health Information Technology; School Health Clerk; Radiologic Technology; Radiation Therapy Technician; Diagnostic Medical Sonography; Athletic Training and Sports Medicine; Psychiatric Technician; Dental Occupations; Recreation Therapy; Emergency Medical Services; Paramedic; Mortuary Science; Community Health Care Worker; Electro-Diagnostic Technolog; Physical Therapy Assistant; Massage Therapy

Family and Consumer Sciences

Interior Design and Merchandising; Fashion; Life Management; Child Development/Early Care and Education;  Nutrition, Foods, and Culinary Arts; Hospitality; Family Studies; Gerontology

Public and Protective Services,

Public Administration; Parks and Recreation Management; Human Services; Fire fighting; Criminal Justice (Police or Prison); Legal and Community Interpretation

There’s very little scholarly research in the area of vocational training. Hundreds of researchers have looked at whether the cost of a four-year degree is worth it and at how having one will boost lifetime earnings. And many researchers have looked at the value of a two-year associate’s degree. But vocational training is a notoriously difficult area to study. Some of it takes place at high schools. Some of it takes place at community colleges. For-profit schools and industry trade associations offer programs, too. And each state categorizes programs differently. At California’s community colleges, for example, a two-year degree in nursing is considered “career and technical education,” but other states consider nursing to be a non-vocational “academic” degree.

Finally, scholars are starting to tackle this often-ignored area of higher education. In 2014, different groups of researchers looked at outcomes for vocational training in Kentucky, California, North Carolina and Virginia. In some cases, they found positive returns, but not all. For example, the Kentucky study found much better returns for men who get vocational training than women. 

In this case, researchers at the University of California, Davis, were able to examine the career and technical training programs offered by California’s community colleges — the largest community college system in the country, with 2.6 million students. They found that vocational certificates and degrees are getting more popular. They not only account for more than half of all the degrees conferred by California community colleges each year, they’ve also grown 50 percent in the last 20 years. Some are short two-month certificates. Others are two-year associate’s degrees that some students took years to complete, studying part-time. Engineering and industrial programs are still among the top six fields that students study, but most of the programs are in non-mechanical fields, from business to prison management.

The researchers tracked the wages of students before and after they received their vocational training, to see what kind of difference it made. And they compared salary increases against those of similar students who started the vocational training but didn’t complete it. They found that not all vocational degrees lead to higher income. In some fields, especially healthcare, vocational degrees pay off enormously — as much as 65 percent more income per year, compared to a similar student who had a similar wage history prior to starting a healthcare degree, but didn’t complete it.  For others fields, such as in informational technology (IT), they don’t. Indeed, when you remove all healthcarerelated fields from the analysis, the average salary increase attributable to vocational training was only 5 to 10 percent.

“Short-term certificates, in some cases, can have high returns,” said Michal Kurlaender, one of the authors. “But there’s a huge range.”

A healthcare certificate program that you can complete in less than a year showed an 11 percent return. But a two-year business or IT degree showed returns of 1 percent or less.

The researchers didn’t compare degrees with each other. So they’re not saying that a healthcare certificate will get you more salary than an IT one will, or that firefighting will earn you more money than baby daycare. The research effectively puts you in the shoes of an individual student, calculating how much extra income a student makes, on average, from completing a degree, compared to a similar student who started a degree in the same field but didn’t finish it.

To be sure, one reason that healthcare has such a high rate of return is that you often need a degree to work in that field. For example, you can’t be a nurse without a nursing degree or a pharmacist without a pharmacy degree. Other fields, such as business or IT, don’t require a license to practice. Still, some childcare jobs require licensing and education, yet the returns attributable to these vocational degrees weren’t nearly as high.

One major weakness of the study is that it grouped many different types of vocational programs under one of six big umbrellas: health, business, IT, industrial, family/consumer and public protective. Healthcare covers not only nursing, but more than 40 specialties, from x-ray technician and dental hygienist to mortuary worker and paramedic. Less well-paid specialties, such as massage therapist and school health clerk, are lumped in there, too. (Accompanying this article is a list of vocational programs for each field).

The authors caution against dismissing all vocational IT programs even though the return for a two-year degree was zero. (That is, similar students without the degree earned just as much salary.) This broad category includes not only certificates in a sought-after computer programing language, such as SQL or Java, but also secretarial-type programs in data entry. “It behooves us to disaggregate that a lot more,” said Kurlaender.

The study offers some hope for students older than 30, who are either late in establishing a career or are retraining for a new career. The returns to the investment in a vocational degree were as strong for them as for younger students.

It might seem tempting to suggest that we should steer students to the vocational programs with the highest rates of return. “Why don’t we just switch cosmetologists to the health sector?” asked Ann Huff Stevens, an economist who is another of the study’s authors and the interim dean of the UC-Davis School of Management.  “The answer is that a lot of them don’t have the prerequisites to get into them.”

A health program might require, for example, two semesters of college-level physiology just to apply. Many students aren’t interested in or can’t pass those science courses. Even with stiffer application requirements, Stevens found that there are often far more qualified applicants than seats available.

Knowing how much of a salary boost other students have typically gotten from a particular vocational degree is welcome new information. It shows that sometimes, finding a mentor and getting more on-the-job experience might be just as valuable as formal training. It all depends on your field.

[Cross-posted at The Hechinger Report]

Jill Barshay

Jill Barshay is the founding editor and writer of Education By The Numbers, The Hechinger Report's blog about education data.