Community College Associate Degree Brings “Large Wage Premium”

Community College Associate Degree Brings “Large Wage Premium”

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The following post was originally published on the Youth Transition Funders Group’s blog on 8/14/12

College and Career Readiness through Blended Learning | JFYNetWorks

A recent study from the National Bureau of Economic Research found that “students who obtain certificates/degrees from a public or not-for-profit institution receive a large wage premium. The value of an associates degree is large and statistically significant at the .05 level or better… with magnitude as large as 14 log points.”

The new data surfaced in an August 4 editorial in the New York Times. The June 2012 NBER study compared the benefits of associate degree programs at public and non-profit colleges with programs at for-profit colleges. In contrast to the benefit of a public or non-profit degree, the study found “little evidence of a return [increased earnings] to any certificate or degree from a for-profit institution.”

Since JFYNet works primarily with students who are going to public community colleges, the for-profit vs. non-profit comparison is not of direct interest to us. We are, however, very interested in the economic value of a certificate or degree from the institutions we do work with. This NBER study, in its dry statistical language, confirms what previous data have shown: getting into community college and getting an associates’ degree is a valuable and necessary first step toward earning a decent living.

The highest barrier to getting that degree is the requirement of non-credit developmental courses following low scores on the Accuplacer (or other assessments). JFYNet helps students succeed on the Accuplacer, surmount developmental courses and get on the degree track. Our Accuplacer Readiness instructional program has eliminated 301 developmental courses so far, saved students $150,500 in tuition and fees, and enabled them to take for-credit courses that count toward a degree.

We’ve always believed in the value of a community college degree. We knew that an associates’ degree brings an average lifetime earnings increase of $223,000, and that degree holders are twice as likely to have full-time jobs as high school graduates. Now we’re glad to have NBER confirm the value of a community college degree with its statistical seal of approval.

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