Claire Fiddian-Green: Learning programs must align with labor-market needs

By 2031, 72% of U.S. jobs will require some form of education beyond high school, but our education outcomes do not put us on track to meet that need. To help increase educational attainment levels and strengthen the talent pipeline, Indiana has worked intentionally to establish education and training programs that award short-term credentials.

The term “short-term credential” refers to all credentials that take less time to complete than a college degree (typically less than two years). Short-term credentials can be divided into two categories: skills-training credentials and credit-bearing certificates. Skills training refers to workforce-focused training that can lead to certificates of completion, industry certifications or licenses. Credit-bearing certificates are awarded by postsecondary institutions to students who complete a set of college credits/courses.

Indiana’s concerted effort to promote short-term credentials increased the number of credit-bearing certificates awarded by over 500% from 2010 to 2021. However, research on their educational and labor-market outcomes is limited.

To better understand their impact, Ascend Indiana, with funding from the Indianapolis-based Richard M. Fairbanks Foundation, commissioned California-based RAND Corp. to evaluate Indiana’s short-term credentialing landscape. The study was just released on Jan. 31.

Due to data limitations, the study focuses on credit-bearing certificates, which are just one portion of short-term credentials. Much of this growth has come from students, including high schoolers, who complete the Indiana College Core, a 30-credit block transferable to any Indiana public college, as well as some private colleges.

Earning the ICC is intended to help students transfer more seamlessly into a college degree program and decrease their time spent in college. Notably, about 70% of the credit certificate-earners in Indiana “stack” credentials, meaning they go on to complete additional certificates or degrees. ICC earners are even more likely to stack credentials by earning a college degree, a very positive result.

One of the most important findings in the study is about wage outcomes. On average, earning a credit-bearing certificate leads to a 20% wage increase—an average annual wage gain of roughly $4,700 in the six years following certificate attainment. Yet, the average annual earnings for certificate earners remain relatively low, at $28,700. While any increase in wage can be viewed positively, an average annual wage of less than $30,000 falls well below the “living wage” thresholds for central Indiana. It is concerning that most certificate-earners are not earning a livable wage after completing their program.

Another concern is the limited state data on skills-training credentials. It is currently not possible for researchers to link the data in a way that allows us to understand education or labor-market outcomes. To better meet labor-market demands and strengthen our economy, we must improve Indiana’s data infrastructure so we can easily: 1) ensure credentials are aligned to employers’ needs, 2) track outcomes, and 3) assess whether students realize a positive return on their investment.

There is no doubt we should increase the number of Hoosiers earning degrees or credentials after high school, as the labor market is clearly demanding a higher level of education and skills. Indiana leaders should be proud of the steps they have taken to make this increase in educational attainment a reality. The RAND study also underscores the critical need to ensure all work-based learning programs offered to students—whether during or after high school—align closely with employer needs and also help employees earn a livable wage shortly after receiving their credentials.•

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Fiddian-Green is president and CEO of the Richard M. Fairbanks Foundation, whose mission is to advance the vitality of Indianapolis and the well-being of its people. Send comments to ibjedit@ibj.com.

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