Study finds big payoff for community college
Large rewards seen in labor market, program completion key
WITH A NATIONAL debate underway over whether the federal government should guarantee free community college for all Americans, a new study of Massachusetts students provides strong evidence of just how valuable two-year colleges can be to students’ future employment and earnings.
Those graduating with a two-year associate’s degree from Massachusetts community colleges had earnings that were 31 percent higher than their peers who only completed high school, according to the study, while those obtaining a community college certificate — a credential in a specific field without a full, two-year degree — saw earnings that were 26 percent higher than high school graduates. Even completing at least two semesters of community college without getting a degree or certificate led to a modest 2 percent earning premium for those who were in the workforce. Average annual earnings were $29,700 for degree recipients, $28,600 for those with a certificate, and $22,600 for those with only a high school diploma.
“There is real labor market value to these certificates and to associate’s degrees,” said Alicia Sasser Modestino, an associate professor of public policy and urban affairs and economics at Northeastern University and co-author of the report, which was released Thursday.
The study, sponsored by The Boston Foundation, Northeastern University’s Dukakis Center for Urban and Regional Policy, and the nonpartisan think tank MassINC, looked at the labor market experience of nearly 58,000 Massachusetts students who graduated from high school over a three-year period roughly a decade ago and had not gone beyond community college by 2018.
The new study, using educational attainment and wage data now available through a state system, sought to zero in on the actual impact of community college studies by comparing students to peers who had similar academic and attendance records in high school but did not go on to higher education.
The results show that community college education “really confers value,” said study co-author Ben Forman, the research director at MassINC, which is the publisher of CommonWealth.
The earnings benefit of community college education came, in part, from the greater likelihood of being employed, with women who got an associate’s degree 18 percentage points more likely to be working than peers with similar academic preparation who had not gone beyond high school. For men, the employment gain was 12 percentage points.
The earnings benefits from community college degrees or certificate programs tended to be greater for women than men. One reason for that, the authors say, is that construction jobs, which are dominated by men, are one of the main paths still available to decent earnings for those with only a high school education.
The study found earnings gains for community college degree or credential recipients who enrolled immediately after high school as well as for those who did so one to five years after finishing high school. For the latter group, the researchers were able to track earnings in the interval between high school and community college enrollment, allowing for even stronger analysis of the income boost enjoyed by those who went on to get a degree or certificate compared with peers who only finished high school.
The study found significant differences in employment rates and earnings based on a student’s field of study. Women who had gone directly to community college after high school and got a degree and employment in a health field, for example, earned 61 percent more than their peers who did not go beyond high school. That earnings premium was more than twice as large as that seen for women in law enforcement, STEM, or liberal arts fields.
Combining the gains from greater employment rates with the earnings from those who are working, women had annual earnings premiums ranging from $3,300 for STEM field degrees to $14,100 for those health fields. Men had earnings gains from $2,500 per year from business degrees to $10,000 in STEM fields, an area where they saw greater income gains than did women.
About 30 percent of the students in the report who got an associate’s degree studied liberal arts fields, but the study found that the employment and earnings benefits for such students were modest.
“For liberal arts degree holders, that degree really did not offer much of a payoff if anything at all,” said Modestino.
Even the modest earnings gains from liberal arts degrees were seen entirely for women, with men who got associate’s degrees in these fields actually earning less than their peers with only high school diplomas.
For low-income, Black, and Hispanic students the study offered good news as well as troubling findings.
Among students in those groups who obtained associate’s degrees, their employment rates and earnings benefits, the study said, “are equal to (or in some cases greater than) the gains of their White peers.” Asian students also had benefits comparable to those of Whites.
While the outcomes for Black and Hispanic students who get over that finish line are as good as those of their White and Asian peers, far fewer of them make it that far. Black and Hispanic students in Massachusetts are twice as likely to enroll in community colleges as White students, but they are only about half as likely to earn an associate’s degree. Asians are less likely than other groups to pursue community college studies, but also graduate at rates lower than Whites.
Just 11 percent of Black students obtained a certificate or associate’s degree. For Hispanic students, the figure was 13 percent, while it was 14 percent for low-income students. Among White students, 21 percent got a certificate or two-year degree, while 23 percent of non-low-income students completed a community college program.
“Unless we do something about those completion disparities, community colleges will be yet another institution in society that is furthering racial inequality,” said Forman.
Pam Eddinger, the president of Bunker Hill Community College, said community colleges have not only been working to work to bring up the academic skills of Black and Hispanic students who may arrive less well prepared than their white peers, they also must address factors like economic stress that often force them to interrupt their studies to earn income as well and provide added supports for students who “don’t have a sense of belonging” on campuses.
She said wraparound services and “peer counseling” for young men of color, in particular, are crucial. Last year, the state awarded the 15 Massachusetts community colleges $7 million in “success funds” to support such efforts. “It’s not a big pot of money, but we know it’s what’s needed,” said Eddinger.
With billions of dollars in pandemic relief funds going to states, and President Biden has proposed making community college free to all Americans, the authors say money for community colleges should be targeted to those in greatest financial need.They also say resources should be focused on efforts that not only expand access to two-year colleges but help students complete programs and receive a degree or certificate. Those include more funding for the kinds of wraparound support the state began funding last year, and initiatives like the state’s Early College program, so far in place in 35 high schools, that allows low-income high school students to take credit-earning courses at no cost at local community colleges, putting them on a path to degree completion.
“There’s a lot of money flowing” from the federal government, said Modestino. “And we’re showing if you put that into community colleges, there’s a clear return on investment for students in terms of their likelihood of being employed and their future earnings, and that adds to the productivity of the region. But don’t just throw it at them,” she said of money for community colleges. “We know there are certain programs that have a higher payoff.”