Evaluation Summary: The Value of Postsecondary Credentials in the Labor Market

The past decade has seen rapid growth in for-profit and online universities. Between 2002 and 2012, for-profit colleges accounted for 42 percent of postsecondary enrollment growth and online institutions accounted for 20 percent. However, little is known about how employers view these postsecondary degrees.

In a randomized evaluation, Amira Abulafi (NBER), David Deming (Harvard), Claudia Goldin (Harvard), J-PAL affiliate Lawrence Katz (Harvard), and Noam Yuchtman (UC Berkeley) tested whether postsecondary credentials affected the likelihood of receiving a response from the employer. The evaluation focused on job openings in business and health fields in five major US cities.

The researchers found that for jobs that did not require a degree, there was no advantage to having a postsecondary credential from a for-profit institution relative to having no postsecondary credential at all. And the results indicated that “for business job vacancies that require a bachelor’s degree, employers strongly prefer applicants with degrees from public institutions as opposed to applicants with degrees from for-profits. Callback rates differ by more than 20 percent.”

Read our full evaluation summary on the J-PAL North America website.

Study Cited: Deming, David, Noam Yuchtman, Amira Abulafi, Claudia Goldin, and Lawrence Katz. 2016. “The Value of Postsecondary Credentials in the Labor Market: An Experimental Study.” American Economic Review 106(3):778-806.

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