Can Stacking College Credentials Improve Workers’ Economic Outcomes?
Lenard and Wright-Kim (2026) examine whether earning multiple college credentials increases workers’ earnings and employment. They analyzed New Jersey education and employment records for nearly 26,000 adults, including approximately 900 who earned a second credential. They found that completing an additional credential increased earnings by approximately $703 per quarter, or 6%, compared with workers who pursued but did not complete a second credential. Workers also increased their time employed by 3%. Earnings gains were especially large in healthcare, reaching 16%. They found greater benefits for women and Black workers, particularly those earning an associate degree as their second credential.
Why This Article Was Selected for The Policy Scientist
As technological change reshapes labor markets, opportunities for workers to acquire additional skills throughout their careers are increasingly important. Shorter college programs may provide flexible alternatives to traditional degrees, particularly for adults balancing employment and education. Understanding their economic returns is essential for evaluating workforce development strategies. Published in Education Finance and Policy, a respected journal in education economics, this study contributes evidence from extensive administrative records. Its individual fixed-effects models and employment histories strengthen causal inference, although unobserved changes may still influence outcomes. Findings from New Jersey warrant replication elsewhere, particularly in states with different labor markets and educational systems.
Full Citation and Link to Article
Lenard, M. A., & Wright-Kim, J. (2026). Economic returns to postsecondary credential stacking. Education Finance and Policy. Advance online publication.
Central Research Question
Does earning multiple postsecondary credentials improve workers’ earnings and employment outcomes? More specifically, does completing a second college credential generate additional economic benefits beyond those associated with an initial certificate or associate degree? The research examines credential stacking, a process through which individuals accumulate multiple postsecondary credentials over time. These credentials may represent progressively higher educational qualifications, such as advancing from a certificate to an associate degree, or additional qualifications at the same educational level, such as earning two associate degrees. This approach is particularly relevant to working adults who alternate between employment and education as they respond to changing labor market conditions, technological developments, and employer expectations. Rather than pursuing a traditional four-year degree, workers may obtain shorter credentials at different stages of their careers. The researchers investigate whether completing a second credential increases quarterly earnings, weeks worked, and employment probability. They also examine whether the economic returns differ across demographic groups, occupational fields, and educational pathways, providing evidence about which forms of additional education produce the greatest labor market benefits.
Previous Literature
The research builds upon established scholarship concerning human capital, educational attainment, and labor market outcomes. Becker (1964) and Mincer (1974) developed foundational theories explaining how education can increase workers’ productive capabilities and earnings potential. Card (1999) subsequently synthesized extensive evidence concerning the economic returns to schooling, finding that additional education generally produces substantial earnings benefits. More recent scholarship has examined whether these relationships extend to shorter postsecondary programs. Jepsen et al. (2014), Xu and Trimble (2016), and Minaya and Scott-Clayton (2022) documented the economic returns associated with community college credentials. Their findings generally indicate positive returns to associate degrees, although benefits vary considerably across academic disciplines, credential types, and demographic groups. These studies establish that the economic value of postsecondary education depends not simply on educational attainment but also on the specific qualifications workers acquire.
Research examining credential stacking remains comparatively limited. Bailey and Belfield (2017) documented the prevalence and economic implications of accumulating multiple credentials, while Bohn and McConville (2018) examined credential stacking in California and identified particularly substantial benefits in healthcare occupations. Daugherty et al. (2020) investigated stacking in Ohio, finding that workers who progressed from certificates to higher qualifications generally experienced larger earnings increases than those accumulating credentials at equivalent educational levels. More recently, Meyer et al. (2025) examined credential stacking in Virginia and estimated an approximately 7% earnings increase among individuals completing additional credentials. Collectively, these studies suggest that credential stacking can improve economic outcomes, but the magnitude of these benefits varies considerably across states, industries, and educational pathways. The present research extends this literature by examining multiple credential sequences, incorporating weeks worked as an additional labor market outcome, and investigating differences across demographic groups.
Data
The researchers use administrative records from the New Jersey Statewide Data System, which integrates information from state education, higher education, financial assistance, and labor agencies. These records allow individual educational histories to be linked with subsequent employment and earnings over extended periods. The analytical sample includes approximately 26,000 adults, comprising roughly 900 individuals who completed a second credential and 25,000 who attempted but did not complete one. Participants were at least 20 years old when they first enrolled in college and no older than 60 when stacking occurred. The study examines individuals who completed their first credential between 2000 and 2011, encompassing cohorts before and during the Great Recession. Employment records extend from 1999 through the third quarter of 2021, providing substantial information about workers’ earnings trajectories before and after additional education.
Credential stacking is defined as completing two subbaccalaureate credentials within five academic years. The comparison group consists of individuals who earned an initial credential, subsequently reenrolled, but did not complete a second credential within that period. The principal outcomes include quarterly earnings, measured in inflation-adjusted 2021 dollars, and weeks worked per quarter. Employment status is approximated using positive earnings and weeks worked. Although the administrative records provide extensive longitudinal coverage, they exclude certain categories of employment, including self-employment and work performed outside New Jersey.
Methods
The researchers employ longitudinal fixed-effects regression models to estimate the economic effects of credential stacking. Individual fixed effects account for stable personal characteristics that could influence both educational attainment and labor market outcomes, while time fixed effects address common economic conditions. Individual-specific linear time trends account for differences in workers’ earnings trajectories. The principal estimates compare changes in labor market outcomes among individuals completing a second credential with changes among individuals who pursued additional education without completing another credential. This comparison helps distinguish the economic benefits associated with credential completion from those associated with additional schooling alone. The researchers also employ event-study models to examine earnings and employment patterns before and after credential completion. These analyses provide evidence of broadly comparable pre-treatment trends, supporting an important assumption underlying their identification strategy. Additional sensitivity analyses examine alternative stacking periods, age restrictions, earnings histories, and specifications of individual time trends. Although these approaches strengthen causal interpretation relative to conventional cross-sectional regression, they cannot eliminate all potential selection bias. In particular, unobserved changes affecting educational completion and subsequent earnings could influence the estimated effects.
Findings/Size Effects
The principal finding is that completing a second postsecondary credential increases quarterly earnings by approximately $703, representing a 6% increase relative to workers who attempted but did not complete an additional credential. Credential stacking also increases labor supply by approximately 0.35 weeks per quarter, equivalent to a 3% increase. However, the researchers find no statistically significant overall increase in employment probability. Economic returns vary substantially across occupational fields. Healthcare workers experience particularly large benefits, with quarterly earnings increasing by approximately $1,415, or 16%. Their weeks worked increase by approximately 7%. There is also suggestive evidence of a 1.5-percentage-point increase in employment probability, although this estimate is only marginally statistically significant. By comparison, the researchers find no statistically significant earnings benefits from credential stacking in business-related fields. These differences indicate that the economic value of additional credentials depends considerably on the occupational context in which they are obtained.
The sequence of credentials also matters. Workers progressing from a certificate to an associate degree experience earnings increases of approximately $1,148 per quarter, or 11%. Individuals earning two associate degrees receive an additional $656 per quarter. Within healthcare, workers progressing from a certificate to an associate degree experience particularly substantial earnings gains of approximately $1,796 per quarter, representing a 20% increase. The researchers also identify differences across demographic groups. Women completing additional credentials experience quarterly earnings increases of approximately $875, or 9%, alongside a 4% increase in weeks worked. Black workers experience earnings increases of approximately $1,760 per quarter, representing a 15% gain. However, these improvements do not necessarily eliminate existing earnings differences between demographic groups. In particular, the researchers find limited evidence that credential stacking substantially narrows established earnings disparities, even when certain groups experience relatively large percentage increases.
The estimated benefits also vary over time and across statistical specifications. Event-study estimates indicate that earnings benefits generally persist for several years but begin diminishing around five years after completion, while increases in weeks worked diminish after approximately two years. Sensitivity analyses generally support the principal findings, although estimated earnings effects depend partly on the specification of individual time trends. Restricting trends to the pre-completion period reduces the estimated quarterly earnings benefit from $703 to $531, indicating uncertainty surrounding the precise magnitude. Nevertheless, the overall pattern remains consistent with positive economic returns to completing additional credentials, particularly in healthcare and when workers progress toward associate degrees.
Conclusion
The research provides evidence that accumulating multiple postsecondary credentials can generate meaningful economic benefits for working adults, particularly when additional education leads to an associate degree or provides qualifications in healthcare. The findings extend existing research by demonstrating that credential stacking affects both earnings and the amount of time individuals work. They also identify substantial differences across educational pathways, industries, and demographic groups. Importantly, the study examines credential accumulation occurring without formally structured stacking programs. Consequently, the findings concern naturally occurring educational pathways rather than the effectiveness of a particular government intervention. Several limitations affect interpretation, including incomplete employment coverage, potential selection bias, and the concentration of observations within a single state. New Jersey's educational institutions and labor markets may differ substantially from those elsewhere, limiting the immediate generalizability of the estimates. The results nevertheless contribute to understanding how workers accumulate economically valuable qualifications throughout their careers. Future research evaluating formally established credential pathways, preferably through stronger causal identification strategies or randomized evaluations where feasible, could clarify whether these benefits generalize across jurisdictions and whether structured programs produce comparable improvements in workers’ economic outcomes.
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