Credentialing for What? Examining the Labor Market Returns of Aligned and Misaligned Industry-Based Certifications in Texas
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| Title: | Credentialing for What? Examining the Labor Market Returns of Aligned and Misaligned Industry-Based Certifications in Texas |
|---|---|
| Language: | English |
| Authors: | Jacob Kirksey, Jennifer Freeman, Braden Re, Angela Crevar, Society for Research on Educational Effectiveness (SREE) |
| Source: | Society for Research on Educational Effectiveness. 2025. |
| Availability: | Society for Research on Educational Effectiveness. 2040 Sheridan Road, Evanston, IL 60208. Tel: 202-495-0920; e-mail: contact@sree.org; Web site: https://www.sree.org/ |
| Peer Reviewed: | Y |
| Publication Date: | 2025 |
| Document Type: | Reports - Research |
| Education Level: | High Schools Secondary Education Postsecondary Education |
| Descriptors: | Education Work Relationship, Certification, Career and Technical Education, High School Graduates, Alignment (Education), Employment, Income, Postsecondary Education, Outcomes of Education |
| Geographic Terms: | Texas |
| Abstract: | Background and Policy Context: Incorporating Industry-Based Certifications (IBCs) into high school curricula is a key component of Texas's College, Career, and Military Readiness (CCMR) accountability system. Designed to serve as labor market signals of occupational readiness, IBCs are credentialed by third-party certifying entities and are intended to provide direct-to-workforce students with skills needed to immediately earn a self-sustaining income after high school graduation. However, IBCs vary widely in alignment with local workforce demands and with both students' coursework (Giani, 2022). Texas has experienced a marked increase in the number of students earning IBCs, driven in part by state policies offering accountability incentives to school districts and emphasizing noncollege pathways in pursuit of the "60x30TX" goal--having 60% of Texans aged 25-64 earn a credential or degree by 2030. Yet, despite these policy efforts, limited empirical evidence exists regarding the value of IBCs--particularly whether their labor market returns depend on their alignment with students' high school programs of study or regional economic demands. This study addresses this critical policy-research gap by investigating the economic returns of IBCs with a particular focus on differentiating between IBCs that align and IBCs that do not align with students' Career and Technical Education (CTE) program of study. By leveraging statewide longitudinal data, we examine the connection between IBCs, CTE, and wages for students entering the workforce directly from high school. Research Questions: (1) For students entering the workforce directly after high school, what is the association of earning an aligned versus misaligned IBC on the likelihood of employment in Texas and early-career earnings?; (2) For students pursuing postsecondary education after initial workforce entry, what is the association of earning an aligned versus misaligned IBC on earning an additional credential aligned to local labor market demands?; and (3) Do these effects vary across student subgroups or across regional labor markets? Data and Sample: We draw on administrative records from the Texas P-20W data system housed at the University of Houston Education Research Center. These linked data include student-level academic and course completion records from the Texas Education Agency (TEA), postsecondary enrollment information from the Texas Higher Education Coordinating Board, and quarterly earnings and industry-specific employment data from the Texas Workforce Commission. Our analytic sample includes two graduating cohorts (2017-2018). Table 1 displays demographic and academic characteristics of students in our sample. We apply several sample restrictions prior to our analysis. First, we limited our sample to on-time high school graduates who did not enroll in postsecondary education within two years of graduation. Additionally, we removed students who did not attend high schools that offered IBCs. Lastly, our analysis is limited to students for whom we can identify in the workforce data, which relies on observable employment records in the Unemployment Insurance wage reports. This excludes students who are working out of state, self-employed, or in informal labor markets. Key Variables: The key variable of interest is whether a student earned a TEA-approved IBC upon high school graduation. TEA publishes a crosswalk that aligns IBCs to CTE programs of study. We construct new indicator variables representing whether students' IBCs aligned with their completed CTE programs of study. In alignment with TEA, we consider a student to have completed a CTE program of study if the student completed three or more courses from the same program of study, one of which must have included a level 3 or level 4 course. Empirical Strategy: We employ two analytic approaches to estimate the labor market returns to IBCs. First, we begin with the following baseline OLS model: [numerical equation omitted], where Y represents either annual earnings or a binary indicator of employment for student i in school j in cohort c. The key variable is IBC, which is a binary indicator for whether a student earned an IBC. The model includes a vector of student-level covariates X, which includes those characteristics shown in Table 1 as well as binary indicators for each CTE program of study. The model includes fixed effects for the high school from which a student graduated as well as the student's graduation cohort. To examine differences between aligned and misaligned IBCs based on students' CTE program area of study, we expand IBC into two binary indicators, representing aligned and misaligned IBCs. Thus, the reference group is students who graduated high school with no IBC. To complement this approach, we remove the fixed effects and employ a nearest neighbor, propensity score matching to match students to similar students based on observable characteristics. Findings: Table 2 illustrates results from our analysis of students one year after high school graduation. Each cell represents the coefficient from the variable of interest and its association to each outcome. Coefficients referring to marginal shifts in employment represent changes in likelihood of employment in terms of percentage points. Coefficients referring to marginal shifts in salaries are in terms of percentages. Overall, we found a statistically significant association between earning an IBC and economic outcomes both in terms of likelihood of employment as well as salaries. As shown in the second and fourth columns, marginal shifts in salaries are driven by students earning IBCs that are aligned to their CTE program of study. We conducted analysis on additional years post-high school graduation (up to 5), and the results are remarkably consistent in terms of magnitude each year. The next phase of our analysis will include a breakdown by CTE program of study. Then, we will examine outcomes related to research questions 2-3. Significance: This study contributes both to state and national-level policy by examining an important population: Students who enter the workforce directly following high school graduation. As states continue the trend of incorporating CTE and other workforce-related metrics into school accountability plans, understanding the extent to which these policy levers drive outcomes for students once in the workforce is critical to informing policy considerations and future expansions. |
| Abstractor: | As Provided |
| Entry Date: | 2026 |
| Access URL: | https://www.sree.org/2025-conference |
| Accession Number: | ED677682 |
| Database: | ERIC |
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