Comparing the Labor Market Effects of Alternative Credentials across the Careers of US Workers

Competency based certification programs and licensure requirements have grown dramatically in the United States over the past few decades, yet the quality of such credentials is rarely examined. Are competency based certifications and licenses as valuable to workers as credentials earned through the higher education system, and does their relative value vary across the course of workers’ careers?

This paper draws upon a new dataset from the United States, the National Household Education Survey, to examine the perceived usefulness of competency-based certifications, licenses, and non-degree certificate programs earned through the formal higher education system. For each type of credential, we compare the reported level of utility of the credential for getting a job, keeping a job, and upgrading one’s skills for workers at different phases of their careers. We then compare these types of credentials to each other in terms of their perceived value. Our working hypothesis is that the perceived usefulness of training-based certificates will be higher for younger workers who may lack substantial on-the-job experience, while competency-based certifications and licenses will be perceived as more useful for older workers who may already be proficient in the tasks they perform at work. However, the value of training-based certificates may be relatively more valuable for older workers who work in occupations that involve heavy usage of new technologies. If our hypotheses are supported, this research will point to the need for policymakers to consider how different types of credentials may be more valuable for workers at different stages of their lives. We argue that policies designed to help workers retrain for new careers and remain competitive in later life should consider such differences.