The Labor Market Value of Stackable Credentials

This brief evaluates stackable credentials and their economic value. In theory, stackable credentials allow a student to acquire a credential with labor market value in less time than it would take to earn an associate or bachelor’s degree. Obtaining additional credentials should have additional opportunity costs in terms of tuition and time out of the labor market. However, further analysis of these credentials found that the earnings gained from stackable credentials do not outweigh that of a bachelor’s degree or an associate’s degree with greater labor market experience. Overall, the data does not provide clear evidence that stacking credentials boost labor market outcomes, although the associations are generally positive.

Presently, there is little evidence on the economic value of stackable awards, and finding this evidence is challenging. Stacks are hard to define, and there are many different types of stacks. This brief analyzes differences in earnings across persons with stackable credentials and comparable workers without these awards. Possible outliers, such as types of stackable credentials and the timeframe in which they are earned, are also assessed. Overall, there is some evidence that stacking is associated with higher earnings, but the additional gains from stacking over a single award appear modest.

This 33-page brief analyzes data from 1997 to 2017.

It is not obvious that stackable credentials are beneficial relative to a single award. Therefore, persons with stackable credentials may not have earnings that are higher than persons with only one award. Just because one certificate has labor market value does not mean that an accumulation of certificates will have greater labor market returns. Similarly, that degrees and certificates have labor market value does not imply that their combination with an additional certificate or degree will yield proportionately more value.

The following findings were identified in the analysis of stackable credentials:

• In order for stackable credentials to be of higher value, they should be of short duration so that students do not spend too much time out of the labor market.
• Many stackable credentials do not have market value. Students may be intending to stack awards that correspond to a meaningful career trajectory but instead may end up with unconnected credentials that do not provide a clear labor market signal.
• Stackable credentials should offer students an accumulation of college-level skills that have labor market value.
• Supplemental stacking, stacking certificates that are earned after degrees, are the most common form of stackable credentials.
• Degrees are still valued over stackable credentials.
• This brief was unable to identify which type of stack—supplemental, progression, or independent—yields the highest earnings gains.
• For health fields, stacking appears to be especially important because the aggregate of the certificates led to employment in registered nursing positions.

• Last Updated:
• Created:
• Resource Publication Date: 2017
• Author(s): T. Bailey, C. Belfield
• Funding Source: JP Morgan Chase
• Resource Availability: Publicly available
• Posted by: Wesley Peterson
• Posted in: Workforce System Strategies