We often hear that a bachelor’s degree pays off, literally, long-term, but is that always true? And how do short-term credentials like certificates and training badges really compare?
A recent study from the Center for Social Development at Washington University in St. Louis brings a fresh perspective to these questions. Researchers explored the financial returns of non-degree credentials and degree programs by analyzing outcomes for more than 113,000 people across nine cities and four industries. The findings challenge old assumptions and point toward more inclusive, strategic ways to build a better-educated nation.
Credentials aren’t created equal—and time isn’t everything
We’re used to thinking about education returns in terms of time invested: the longer you stay in school, the more you earn. But this study shows that the connection isn’t so direct. In fact, some short-term credentials—especially those offered by industry—produce income gains on par with or exceeding two-year degrees, despite often taking less time to complete. In contrast, associate degrees tend to offer modest earnings boosts that eventually level off. Short-term, industry-aligned training can be an efficient and valuable option, especially when time and cost are critical barriers.
Some credentials help students climb, while others coast
The study introduces a powerful metaphor: credentials act like elevators, escalators, or walkways. Some (like doctoral and master’s degrees) provide a fast lift followed by sustained upward earnings—elevators and escalators. Others, like associate degrees or school-based certificates, offer a short boost and then level out—a walkway. Understanding these trajectories is crucial for students, advisors, and institutions. It’s not just about the size of the earnings bump—it’s about how long that growth continues and whether it aligns with a learner’s goals.
When education pays off unevenly, equity must lead
Equity is crucial in how we design and invest in education pathways. The study found notable differences in financial returns based on gender and race. Women saw higher gains from associate degrees, while men experienced greater returns from master’s degrees. Black learners saw particularly strong returns from doctoral degrees and non-school-based certificates, but these are sometimes the least accessible pathways for these learners. Gains also varied across industries: manufacturing and STEM fields showed the highest yields from advanced degrees and non-degree credentials, while associate degrees had limited value in those same sectors.
This research reinforces a core tenet of Lumina Foundation’s work: credentials of value should be accessible, equitable, and closely aligned with labor market demand. As we support systems-level change across higher education, we must continue advocating for more nuanced definitions of quality, more transparency in outcomes, and more flexible pathways to success, especially for adult learners, working learners, and historically underserved communities.
A high-quality credential can transform a person’s life. But only when it’s the right credential, for the right person, at the right time. This research reminds us that learners deserve more than promises. They deserve transparent, equitable pathways built for real opportunity.