A.A. Degrees and the Labor Market

While 670,000 students earn two-year degrees from community colleges each year, just 32,000 job postings in 2016 specifically asked for an associate of arts degree, according to a new report from the American Enterprise Institute.

The report's co-authors are Mark Schneider, a visiting scholar in education policy studies at AEI and vice president at the American Institutes for Research, whom the Trump administration in November tapped to lead the U.S. Department of Education's Institute of Education Sciences, and Matthew Sigelman, the CEO of Burning Glass Technologies, a job market research firm.

Five years after graduation, A.A. degree holders earn an average of less than $40,000 a year, the report found. That's partially because the degrees are designed as transfer credentials and not to equip students with marketable skills, the authors wrote.

Average annual earnings of A.A. degree holders would increase by at least $4,000, according to the report, if community colleges added elective, skills-based courses or high-value, industry-recognized certifications to A.A. programs.

"Colleges need to explore more fully how they can fit highly valued skills into existing programs of study, and students still need far more information about the success of those efforts," the report concluded. "It seems unlikely that the A.A. will ever carry the prestige of a bachelor’s degree. That does not preclude the A.A. degree from becoming more valuable than it is today."