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Stackable Credentials: Do They Have Labor Market Value?

By: Thomas Bailey & Clive Belfield

Abstract

Stackable credentials—sequential postsecondary awards that allow individuals to progress on a career path—have been suggested as a way to enhance the labor market prospects of middle-skill workers. Yet, thus far, little evidence has been provided on the economic value of these credentials. In this paper, the authors report a series of estimates on the association between stackable credentials and earnings. They use national, survey, and college-system-level datasets. A significant body of evidence indicates that the labor market returns to certificates—along with those to college degrees—are positive. But the authors' estimates of stackable credentials show only weakly positive and inconsistent gains from these award combinations. Generally, these estimates are indistinguishable from the returns to only one postsecondary credential. There is no clear evidence of how earnings vary across types of stack—progressive, supplemental, or independent—or student characteristics. However, estimated earnings gains from stackable credentials may be imprecise. Few college students stack awards, the motives for stacking are unknown, and notably, the number of stacked awards depends on whether general vocational awards are included. Future research should examine why students stack awards and how they can choose combinations of awards that maximize their earnings gains from stacking.

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