Middle-skill earnings pay.

September 13, 2013

A new report, Higher Education Pays: But a Lot More for Some Graduates than for Others, written by Dr. Mark Schneider of the American Institute of Research, examines the average first-year earnings of graduates from two-year and four-year institutions in Arkansas, Colorado, Tennessee, Texas and Virginia and compares it with the degrees they earned. It found that some certificates and associate’s degrees are far more lucrative than four-year degrees.

According to the report, more and more students are earning short-term credentials, associate’s degrees or occupationally-oriented certificates that will lead to a middle-skill job. Last year, more than 600,000 certificates and over one million associate’s degrees were awarded. This is not surprising with an uncertain job market and the cost of a higher education skyrocketing. And many who complete a short-term credential will out-earn graduates with bachelor’s degrees.

For example, graduates in Texas with technical associate’s degrees earned on average over $11,000 more in their first year after graduation than did graduates with bachelor’s degrees. In Virginia and Colorado, graduates with longer term certificates—certificates that take 1-2 years to complete—earned about $3,000 more on average in their first year of employment than graduates with transfer-oriented associate’s degrees.

The jobs that these graduates are taking—middle-skill jobs—are in-demand. According to National Skills Coalition, middle-skill jobs make up the largest part of America's labor market but often are going unfilled because employers are unable to find sufficiently trained workers to fill these jobs. As a result, job creation and economic growth are stifled.

More research needs to be done to determine how graduates with occupationally-oriented certificates or associate’s degrees fare years after completing the program compared with those who graduate with a bachelor’s degree or higher. However, the lack of middle-skilled workers compared with the demand shows that we need more people to opt for short-term credentials.

To find out more about the report’s findings on short-term credentials versus a four-year degree, plus other findings on earning based on where and what is studied, visit