Policy & Research

Research: Community College Pays Off

• By Dian Schaffhauser
• 04/18/17

Earning a two-year degree pays off. Specifically, completing an associate degree yields an average of $4,640 to $7,160 more per year than entering college and not completing a program.

So concluded a research project by the Center for Analysis of Postsecondary Education and Employment. CAPSEE is a government-funded research center that examines the financial returns on various education pathways.

In this initiative, researchers used "very large datasets" from eight states that merged student transcripts from statewide community college systems with information on transfer college records from the National Student Clearinghouse. Individual-level full college records were then merged with quarterly earnings data from unemployment insurance records spanning a decade in the labor market. The goal was to gain a more detailed understanding of how community college students fare in the labor market and how the college experience varies by field of study.

Source: "Does It Pay to Complete Community College — and How Much?" from the Center for Analysis of Postsecondary Education and Employment.

Among the states examined, the monetary return for achieving an associate degree compared to starting one but not finishing was highest in Kentucky. There, men earned $6,960 more per year, and women earned $11,080 more. The lowest increase for men surfaced in Arkansas, where the difference was $1,160; for women, the lowest difference was in Washington, where the gain was $4,000.

The researchers also calculated the earnings difference for completing a certificate. For that, the average across all states was $2,120 for men and $2,960 for women. Although the increases were more modest, the report stated, it's still a "positive finding" because achieving a certificate doesn't typically require the same commitment as earning a degree.

Even students who start but don't finish their college careers tend to enjoy financial benefits, the researchers found. "More credits lead to higher earnings," they wrote. That's an important consideration, they added, in a time when fewer than half of those who start college earn a credential.

The news should motivate people — both potential students and "taxpayers" — to "invest" in college, the study concluded. Now, the report added, it's time to figure out "why completion rates at two-year colleges are so low."

A research brief and the full report are available on the CAPSEE website here.