tc columbia

Stackable Credentials: Awards for the Future?

By: Thomas Bailey & Clive Belfield

Abstract

Stackable credentials—sequential postsecondary awards that allow individuals to progress on a career path—can enhance the labor market prospects of middle-skill workers. In light of recent labor market changes, these credentials may represent an important buffer against job displacement. However, very little evidence exists as to what constitutes a stackable credential and how many persons have obtained them. The authors distinguish three types of stacking—progression, supplemental, and independent. Using national, survey, and college-system-level datasets, the authors estimate that between 3 and 5 percent of the college-educated population have stackable credentials. However, there are several substantial empirical challenges in identifying stackable credentials related to the ordering of awards and to the degree of skill complementarity across awards. Significantly, the authors find that general vocational awards—earned at any institution and typically not credit-bearing—are often conflated with stackable certificates. The incidence of these awards is far greater than of stackable credentials. A review of the evidence shows that certificates convey modestly positive gains in earnings, but there is no evidence that stacking yields earnings gains. Finally, despite frequent changes in skills needs across the economy, the authors identify barriers to the expansion of stackable credentials.