Technical education certificates, degrees may offer higher earning potential for disadvantaged students, study shows

Low postsecondary performance, completion rates hurt earnings of disadvantaged students

RESEARCH TRIANGLE PARK, NC— Disadvantaged, low-income students may have a higher earning potential by entering a technical certificate or associate's degree program than a four-year program, according to a study by RTI International, American Institutes for Research and Georgetown University.

The study shows that many disadvantaged students choose to study general humanities or liberal studies programs, at both the two- and four-year level, which may result in lower completion rates and less compensation afterwards. 

"The earning potential of disadvantaged individuals is harmed by low completion rates in higher education programs, poor performance during college, and not choosing high-earning fields, said Erin Dunlop Velez, Ph.D., education research analyst at RTI and co-author of the study. "The labor market rewards for college graduates remain high; however, our research showed that young, economically disadvantaged students and minorities are falling behind their middle and upper class peers in attaining a post-secondary education."

The study, published in the IZA Journal of Labor Policy, merged administrative data from secondary and postsecondary schools and unemployment earning data from the state of Florida to examine the college and labor market experiences of more than 210,000 students during the course of 10 to 12 years. The data included information on courses taken, highest degree attained, and earnings information for nearly all Florida residents who attended public school during that time. 

Researchers found completion rates varied widely across racial and gender groups. For every 100 white male students who enroll in an associate's degree program, approximately 30 of those students will complete the degree compared to only 15 black males and 24 Hispanic males. 

Among females, educational outcomes were generally higher in each racial and socioeconomic income level, although their labor market earnings were lower. 

"More guidance and career counseling is needed to guide students for improved academic and job market opportunities," Velez said.