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Do students from low-income backgrounds reap rewards from earning sequential credentials? Recent investments in stackable credentials by states such as Colorado and Ohio, the federal government, and national organizations seem to suggest so.

What Are Stackable Credentials?

Broadly, stackable credential sequences nest short-term credentials, often certificates, in long-term programs, including associate and baccalaureate degree programs. Students can earn a certificate quickly, secure an entry-level job and then later re-enroll in college to acquire complementary skills through an additional certificate program, or advanced skills through a degree program in the field. Nesting short credentials within longer programs ensures that most or all credits are carried forward as the student progresses and completes more advanced credentials. When stackable credentials are closely linked to labor market opportunities, each credential in a sequence should open the door to additional career advancement opportunities.

What Do Advocates and Skeptics Say About Stackable Credentials?

Proponents view stackable credentials as promising options for increasing credential attainment, especially degree attainment. Students pursuing an associate degree who cannot complete the program due to family, financial or other reasons can exit with a certificate that offers meaningful labor market opportunities and later return to build on their earlier progress to complete a degree. Well-designed stackable credential sequences may strengthen connections between college and work. Recent studies in California, Ohio and Virginia have identified significant labor market returns for at least some types of credential stacking.

Advocates for stackable credentials anticipate that their flexibility may better serve students of color, adult students and students from low-income backgrounds, who are more likely to balance education with work, family and other responsibilities. But, whether stackable credential sequences actually benefit students from historically underserved backgrounds is not yet clear. Some evidence suggests that students of color and adult students stack credentials at lower rates. Students who earn a first certificate without stacking another credential may not realize the full economic returns to credential stacking. Further, it is possible that the off-ramps built into stackable credential sequences have a diversionary effect among the least advantaged students, perhaps increasing the chances that they will leave a degree program and not return to college. Indeed, students identifying as Black, Hispanic or Native American represent a greater proportion of certificate completers than they do of associate or baccalaureate degree completers.

Do Stackable Credentials Pay Off for Students From Low-Income Backgrounds?

A recent study by the University of Michigan and RAND investigated the extent to which students from low-income backgrounds stack credentials and whether credential stacking yields labor market gains for these students. Here are five takeaways:

  1. Credential stacking is common among certificate earners, especially those from low-income backgrounds. In Colorado, 42 percent of certificate earners from low-income backgrounds complete an additional credential (certificate or degree) within four years, compared with 36 percent of those from middle- or high-income backgrounds. In Ohio, the gap is smaller—46 percent and 39 percent, respectively—but students from low-income backgrounds still stack at a higher rate.
  1. Among certificate earners who stack credentials, those from low-income backgrounds often stack to associate or baccalaureate degrees. About half of certificate earners who stack credentials in Colorado and three-fifths of those who stack credentials in Ohio do so by completing an associate or baccalaureate degree. In both states, certificate earners from low-income backgrounds stack to degrees at slightly higher rates than their peers from middle- or high-income backgrounds. A growing body of research, including our recent study and prior work in Ohio and California, suggests that labor market returns are greater for students who stack a degree on top of a certificate than for students who stack a second certificate on top of the first.
  2. Stacking two credentials in the same field of study is about as common among students from low-income backgrounds as among students from middle-/high-income backgrounds. Among certificate earners who stack credentials in Colorado, 19 percent of those from low-income backgrounds and 17 percent of those from middle-/high-income backgrounds do so in the field of their first certificate, referred to as “in-field stacking.” In-field stacking is more common in Ohio, with 53 percent of students from both low- and middle-/high-income backgrounds doing so. As with stacking to higher-level credentials, prior research suggests that earning multiple credentials in the same field yields stronger average labor market gains than earning multiple credentials in different fields.
  1. Field of study matters because opportunities to stack credentials, labor market returns to credential stacking and enrollment of students from low-income backgrounds differ by field. For example, education and family and consumer sciences (FCS) award large numbers of certificates to students from low-income backgrounds and facilitate high rates of credential stacking. However, earnings gains from stacking in these fields are limited. Stacking is less common in nursing, but those who stack credentials in this field can see greater economic gains. In mechanics and repair fields, fewer students earn certificates, but those who do are more often from low-income backgrounds and are especially likely to stack credentials and see strong earnings gains.
  2. Students from low-income backgrounds are underrepresented in some fields with strong returns to credential stacking, including information technology (IT) and manufacturing and engineering technology (MET). Certificate earners in IT and MET stack credentials at especially high rates and experience some of the largest earnings gains from credential stacking. Yet, students from low-income backgrounds earn first certificates in these fields at notably lower rates than their middle-/high-income peers.

How Can We Design Stackable Credential Sequences That Better Serve Students From Low-Income Backgrounds?

Some types of credential stacking benefit students from low-income backgrounds, but not all types of stacking pay off equally. Policy makers and institutional leaders interested in designing or expanding stackable credential sequences might identify and focus on those with the strongest employment rate increases and earnings gains in their local labor markets. Designing programs that build to higher-level credentials in the same field of study seems to be especially worthwhile. It also is important to ensure that students have easy-to-find and clear information about how different credentials in stackable sequences are related to one other and what labor market opportunities they can expect to emerge from each credential.

For more information, see our research brief or our full report.

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