Even Some College Tends to Pay Off

Students who attended college but didn't earn a credential were more likely to hold a job and earned more than their peers who stopped at high school, new research finds.

August 22, 2019
 
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Much of the attention around rising college costs and loan debt has focused on students who never earn a credential, with conventional wisdom holding that they wasted time and money in the process.

But a new study found that attending college typically isn’t a waste of time, even for students who fail to graduate.

The research found “very substantial increases in employability and income” for this group of former students, who attended community college or a four-year institution, said Paul Attewell, a professor of sociology at the City University of New York’s Graduate Center, who co-wrote the paper with Matt Giani, a research scientist at the University of Texas at Austin’s Office of Strategy and Policy, and David Walling, a software developer at the Texas Advanced Computing Center at UT.

These benefits extend across various student groups. But the paper said low-income students, women and students of color generally experienced the biggest labor-market bump from college attendance.

Previous studies have been mixed on the payoff for students who hold some college credits but no credential.

Several reached conclusions like this one from a prominent 2017 paper: “Many students leave school without any certificate of degree. They have lost valuable time and frequently have student debt to repay, but they have not managed to measurably improve their prospects.”

The most likely explanation for the ambiguity in previous research, according to the new paper, is the broad range of samples, data sets and methods those studies used.

The new research, however, was based on a statewide cohort of 207,332 students who graduated high school in Texas in 2000. The data allowed researchers to compare college completers and noncompleters, to control for selection bias, and to use unemployment insurance information to examine labor market outcomes for the group 15 years after they completed high school. The Journal of Higher Education published the study.

“The Texas data set is huge. It’s like using a different microscope,” Attewell said, adding that the growing numbers of solid data sets featuring labor-market returns from Texas and other states “are really revolutionizing our understanding of the place of college in the long-term economic prospects of students.”

‘A Stepping-Stone and a Signal’

The study found that students who attended college but did not earn a degree -- including those who earned certificates -- were much more likely to be employed than were members of the cohort who did not go to college. And if they were employed, they tended to have higher earnings (see graphic).

For students who attended college but did not earn a credential, the likelihood of employment increases with greater numbers of college credits earned. (However, students who earned 12 or fewer credits had slightly higher wages than those who earned more credits.)

“Students who do not go beyond high school are considerably less likely to be employed 15 years later than their ‘some college’ counterparts, even after controlling for their academic preparation and socio-demographic characteristics,” the study found.

The one-to-12-credits-earned group, for example, had mean annual earnings of $43,732 compared to $37,675 for people with no college credits. Just over half were employed in this group, while 35 percent of those without college credits were employed.

Not surprisingly, college graduates did even better. For example, people who held a bachelor's degree (arts or science) had a median wage of $64,727, according to the study, with 65 percent being employed.

“What’s most desirable is that people who go to college earn a credential,” Attewell said.

But even a small number of credits appears to have a positive impact on employability and wages, according to the study. “It’s a stepping-stone and a signal,” he said.

The study also found that workers who attended community college but did not earn a degree had a larger wage bump than their peers who attended a four-year public but failed to graduate.

Attewell speculated that employers are considering both job applicants who didn’t go beyond high school and those with some college credits, and they seem to prefer the some-college group.

A growing number of colleges and reformers in higher education are calling for the addition of credentials that can serve as “momentum points” for students on their way to earning a degree. This could be a short-term certificate or an associate degree that students earn halfway to a bachelor’s.

Such an approach can have psychological benefits for students, Attewell said, encouraging them to continue in their academic programs.

Likewise, students who work while they attend college tend to do better in the labor market, he said. That’s the majority of students, with roughly 60 percent holding a job while they’re enrolled.

“They’re not doing this in order,” said Attewell, meaning go to college then find a job. “They’re doing this simultaneously.”

The study was not able to estimate whether the benefits of college attendance were driven by the knowledge and skills students acquired when enrolled or by the signaling effect of having some college on their résumé. But the economic benefits were clear, either way.

“Our results imply that excluding students from higher education might do greater harm than benefit to both students and society, even if admitted students are not very likely to graduate,” the study concluded. “Similarly, our results oppose the notion that college noncompleters have simply wasted their time and resources, as well as the resources of the public sector.”

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