Returns to Associate and Bachelor’s Degrees Remain Strong Through Great Recession, New Study Finds

NEW YORK, NY (April 1, 2014) — Despite the huge growth in unemployment during the years termed the “Great Recession,” students who enrolled in community colleges and completed an associate degree—or went on to transfer and earn a bachelor’s degree—experienced consistently stronger economic returns and were less likely to be unemployed than community college students who accumulated some college credits but no degree, according to a new study from the Center for Analysis of Postsecondary Education and Employment.

The study examined earnings over nine years for students who enrolled in a North Carolina community college starting in 2001–2002. The analysis controlled for student characteristics such as ethnicity, economic need, prior academic achievement, and educational goals, and compared students who obtained any kind of college credential with similar students who accumulated some college credits but no credential.

The study found that for students who enrolled between 2001 and 2008, annual returns to associate degrees remained consistent (around $4,800/year for women and $3,000/year for men) five years after enrollment (2006–2013), despite the advent of the Great Recession in late 2007.

Additionally, students who obtained degrees were less likely to be unemployed. Students who entered a community college in 2002–2003 and completed an associate degree were 4 to 7 percentage points less likely to be unemployed nine years later than those who did not complete an associate degree; students who completed a bachelor’s degree were 5 to 8 percentage points less likely to be unemployed.

Consistent with similar studies in Washington State and Kentucky, the study found large differences in earnings by program of study. For example, nine years after enrolling, students who obtained an associate degree in nursing had annual incomes that were $20,000 to $25,000 higher than students who failed to complete a degree. Degrees in construction, mechanics and welding, and allied health also yielded high returns. On the other hand, women who completed associate degrees in education and childcare experienced no earnings advantage, and men with these degrees earned $5,000 less per year than their male peers with some credits and no degree.

The study also compared returns to associate and bachelor’s degrees at five, seven, and nine years after initial enrollment and found that returns to these degrees grew substantially over time. For example, men’s earnings advantage more than doubled from five years after enrollment ($1,944) to nine years after enrollment ($4,460). This upward trend suggests that even a nine-year window is insufficient to identify the full returns to college degrees.

The study found that the accumulation of college credits, even without a degree, was also associated with post-college earnings increases. Nine years after initial enrollment, students who accumulated 1 to 10 credits earned $2,000 to $4,000 more annually than students who accumulated no college credits.

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Center for Analysis of Postsecondary Education and Employment, Teachers College, Columbia University

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The Center for Analysis of Postsecondary Education and Employment was established in the summer of 2011 through a grant (R305C110011) from the Institute of Education Sciences (IES) of the U.S. Department of Education.

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