However, while there may be substantial economic returns to certificates and Associate degrees, it is equally clear that some kinds of postsecondary education provide no economic advantage at all, so simple recommendations for individuals to continue their education in community colleges and technical institutes are unwarranted. Most apparent is that short periods of time in postsecondary education have uncertain effects. For women, only those who report that they have completed three or four years of college without receiving any postsecondary credentials--consistent with substantial attendance at four-year colleges, not community colleges--have higher earnings than high school graduates. Different amounts of college among noncompleters provide larger and more significant benefits among men than among women, but here, too, the effects of small amounts of college--less than one year, the amount that someone entering a community college for a short period of time might have--are usually too small to be statistically significant and are essentially zero for younger cohorts (age 25-34 and 35-44). Some men may benefit from small amounts of course-taking, then, but the average effect is quite close to zero.
For similar reasons, there appear to be "program effects." In general, completing a certificate is more beneficial than completing one year of college without a credential; an Associate degree is more valuable than two years of college, and a baccalaureate degree increases earnings by more than four years of college without the credential. Once again, this suggests that completing credentials is the wisest course for most individuals.
As is well-known for baccalaureate degrees, the benefits of sub-baccalaureate credentials vary substantially by field of study. Even though small samples affect the inferences possible, some fields of study--health and business for women, engineering, technical fields, and business for men--provide substantial benefits, while others either provide little earnings advantage or, in some cases, benefits that are highly variable. The fact that the most beneficial fields of study are different for men than for women--a result that is not generally true for baccalaureate degrees--indicates the extent of gender segregation in these programs and in the labor market for which they prepare students. It also suggests that the common recommendation of getting women into nontraditional jobs--into jobs in engineering, computers, electronics, and other technical fields--may not benefit them in the ways that proponents of such gender equity imagine. Associate degrees in academic subjects in general fail to increase earnings substantially, suggesting that this credential--which in many states is not intended to be a terminal degree, but rather a credential for transfer students on their way to baccalaureate degrees--does not have a clear role in the labor market. Once again, it matters a great deal what specific kind of education in community colleges and technical institutes an individual chooses.
Another source of variation in the returns to postsecondary education involves the effects of having a job related to an individual's field of study. The returns to related employment are almost always higher than the returns to unrelated employment, confirming the hypothesis that the job-specific nature of vocational education reduces its value in unrelated jobs. Second, while the returns to unrelated baccalaureate degrees and Associate degrees are lower than to related degrees, they still tend to be significant; the implication is that occupational degrees do have some general components that enhance productivity and earnings even in occupations unrelated to the field of the credential. Third, in a substantial number of cases--and particularly among individuals with some college but no credentials--the coefficient for related employment is significant, but that for unrelated employment is not. These are particularly worrisome cases because they imply that completing coursework is necessary but not sufficient to realize economic benefit and that placement in a related occupation is crucial.
The final set of interesting results describes the effects of short-term job training programs on earnings. By and large, the effects are disappointing: only employer-sponsored training provides a consistent boost to earnings for both men and women, though training in trade schools and community colleges is beneficial to women if they find related employment. In addition, the effects of programs are generally greater if an individual's current employment is related to the training he or she received--which is what one might expect, since short-term job training is almost, by definition, relatively job-specific. However, the vast array of government-sponsored job training programs do not increase earnings substantially. There are, of course, many explanations for this finding, principally that such programs enroll individuals with substantial barriers to employment--low skill levels, a lack of motivation or initiative, drug and alcohol abuse problems, and/or physical disabilities--not otherwise described by this data but apparent to employers. Nonetheless, it is clear that most short-term job training programs have not been successful in returning their clients to the mainstream of the labor market.
What are the implications of these findings for policy? In the first place, it is unclear that prospective students, facing an array of postsecondary education options, have sufficient knowledge to make informed decisions. The benefits of a baccalaureate degree are well-known, and the lower returns to certain fields like education, agriculture, and social welfare are also well-known. It is hard to argue that students elect these fields unaware of the economic consequences of their decisions. However, a majority of new entrants to postsecondary education now enter community colleges and other two-year institutions. To transfer to four-year colleges and to earn baccalaureate degrees is the common goal of these students, but it is unclear whether many of them realize how few students manage to transfer and complete baccalaureate degrees, or what the consequences are of completing some college or of obtaining only sub-baccalaureate credentials. A very different group of students coming to community college are older, many of whom have found themselves unemployed as a result of changes in the economy. Many community college students, both of traditional college age and older, appear to be casting about for careers, unsure of their own proclivities or of the options open to them[41]--like the "experimenters" described by Manski (1989). The career counseling available to them is usually inadequate, and information about local labor market alternatives is usually either nonexistent or unreliable.[42] Given the variation in the benefits of different postsecondary programs, one obvious recommendation is that information about the effects of various programs be made more widely available to students than is now the case.
Similarly, it is not clear that state policy--which funds the majority of community colleges and technical institutes--has paid sufficient attention to the outcomes of these institutions. Most state funding mechanisms provide incentives for higher enrollments, rather than completion, since they provide funding on the basis of enrollment or attendance.[43] Similarly, with only a few exceptions, states provide equivalent funding to all programs; this, in turn, means that low-cost programs in fields of study with lagging demand are funded the same as high-cost programs in high demand areas such as health, electronics, and other technical fields.[44] An obvious implication of the results in this monograph, however, is that states should be more concerned about the results of various sub-baccalaureate programs; supporting large numbers of students who fail to complete programs, or who complete programs in areas of low demand and low earnings, may not be a rational policy in the absence of other clear benefits.
Finally, like state policy, federal policy has been more concerned about providing access to postsecondary education--particularly through grants and loans--than with the quality of postsecondary programs, which includes content or coherence, completion rates, or effects on employment. Because student aid has dominated federal postsecondary spending, default rates have tended to drive revisions in postsecondary education policy--but this has tended to focus attention more on proprietary schools than on other sub-baccalaureate institutions such as community colleges, which have lower default rates and much lower amounts of student aid. But default rates are not necessarily the best guides to policy, particularly for institutions such as community colleges and technical institutes in which tuition and student loans are low. The other instrument of federal policy in this arena--federal grants for vocational education, through the Perkins Act--has generally been dominated by secondary concerns and have had little influence on postsecondary vocational programs. Overall, then, federal policy has had little influence on the quality of postsecondary vocational programs; the potential for greater influence has always been present but unrealized.[45]
These three strands of concern--with the well-being of students, with state policy, and with potential federal influences on the quality of postsecondary education programs--all converge in a set of recommendations that are already in the process of implementation. Setting standards for outcomes, operationalizing them in performance standards, and then using the resulting information to provide better advice to students about career options and better information for state and federal policymakers are obvious remedies for the information problems that now exist. The Perkins Act has started this process by requiring all vocational programs to develop performance measures, with most states developing at least some postsecondary standards reflecting labor market outcomes (Rahn, Hoachlander, & Levesque, 1992). To be sure, the implementation of performance measures and standards and the process of devising appropriate rewards and penalties for different levels of performance present both serious conceptual and technical issues. For example, it will be necessary to define who noncompleters are and how they might benefit from brief enrollment; to define "related employment"; to track employment over longer periods of time; and to consider variations in local labor market conditions. But the potential for outcome-related information to generate greater benefits, for students as well as both state and federal taxpayers, is substantial.
In many ways, the increasing concerns with outcomes reflect both the expansion and the maturation of the sub-baccalaureate labor market. As the number of individuals with some college has grown (as reflected in Table 13, for example), the question of what happens to them has become more important. This is particularly the case because of some forecasts that individuals with some postsecondary education, but not necessarily a baccalaureate degree, will face ever-increasing demands in the coming decades because of high-performance workplace requirements. During the same period, expansion has caused postsecondary occupational programs to "mature," to become better institutionalized, and to take a definite shape within community colleges and technical institutes. The ways in which these programs have developed have not always been carefully considered or particularly effective, as the weak ties of many institutions with local employers and the emphasis of state and federal policy on enrollment and access rather than on outcomes all illustrate. But appropriate policies can correct these causes of uneven economic returns and, in the process, help ensure that the promise of the sub-baccalaureate labor market is realized.
[42] See especially Grubb et al. (1992), which is based on surveys of community colleges and employers in four local labor markets, and the interviews mentioned in the prior footnote.
[43]To be sure, there are a few exceptions; for example, Florida requires vocational programs to have placement rates in related employment of 70% and eliminates programs which consistently fall below this level, and Tennessee reserves 5% of funding as incentive bonuses for institutions with high placement rates, as described in Hoachlander, Choy, & Brown, 1989.
[44] Again, the interviews in Grubb et al. (1992) reveal that community college administrators are quite sensitive to the marginal costs and the marginal revenues (state aid plus tuition) in different programs and, therefore, are more likely to support low-cost fields of study than high-cost fields, despite labor market conditions.
[45] For a similar diagnosis of the failures of federal postsecondary education policy, see Committee on Postsecondary Education and Training for the Workplace, 1993.