A Closer Look

Vocational and Technical Education in US – Public sector students outperform for-profit students on nearly every measure study finds

In a forthcoming paper for the Journal of Human Resources, co-authored with Federal Reserve Board of Governors Senior Economist Nicholas Turner, we generate comprehensive new estimates of labor market outcomes and debt incurred by students in vocational (or career-technical education, “CTE”) certificate programs in the for-profit sector. We compare for-profit students’ outcomes to the outcomes of similar students in similar public sector certificate programs. We further compare the employment and earnings of for-profit students to demographically similar individuals who do not pursue any postsecondary education.

Our results are striking: Public sector students outperform for-profit students on nearly every measure, suggesting that the overwhelming majority of for-profit students would be better off attending a public institution. But what if attending a public community college is not an option? Our results suggest that many for-profit students would be better off not attending college at all. On average, for-profit certificate students do not generate enough earnings gains to offset the debt they incur.

To carry out our estimation, we draw on the Department of Education’s GE data matched with tax records from the Internal Revenue Service. Our data include roughly 14 years of earnings history for more than 800,000 federally aided certificate students, allowing us to assess the labor market outcomes of a more comprehensive set of students over a longer time period than prior research. Our analyses focus on students attending for-profit institutions. These institutions often specialize in vocational certificate programs; despite enrolling just 8 percent of postsecondary students, they confer nearly one-third of all short-term certificates.

We find that the earnings gains of for-profit students are substantially lower than the gains for similar students in the public sector. For-profit students are 1.5 percentage points less likely to be employed after leaving their program; if they do find work, their earnings are about 11 percent lower than those of public students.

Putting these effects together, on average, earnings gains are $2,100 lower per year post-college for for-profit students, relative to their matched public sector counterparts. This finding is particularly concerning given the much higher debt incurred by for-profit students—about $5,000 more in our sample. To put these results in perspective, on average, for-profit certificate students earned just over $10,000 in the years prior to attendance.

Chosen excerpts by Job Market Monitor. Read the whole story at Gainfully employed? New evidence on the earnings, employment, and debt of for-profit certificate students

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