Examining the Labor Market Returns of Aligned and Misaligned Industry-Based Certifications in Texas

• In Event: Aligning Course-Taking and Credentialing Programs with Labor Market and Civic Outcomes

Abstract

Incorporating Industry-Based Certifications (IBCs) into Texas’s College, Career, and Military Readiness (CCMR) system is essential for signaling occupational readiness. IBCs, awarded by third-party entities, validate mastery of job-specific competencies, enabling graduates to enter the workforce immediately with employable skills. However, their alignment with regional labor market demands and coursework varies significantly (Giani, 2022).

Since Texas enacted House Bill 22 (2017), the Texas Education Agency (TEA) has annually updated a prioritized list of IBCs aimed at high-demand, high-wage occupations, contributing to the state's "60x30TX" goal—ensuring 60% of Texans aged 25–64 have a credential or degree by 2030. Despite policy incentives, empirical evidence remains sparse regarding IBCs' actual economic value, especially concerning alignment with students' Career and Technical Education (CTE) programs and regional workforce needs.

This study addresses this policy gap, assessing the economic returns of aligned versus misaligned IBCs for high school graduates directly entering the workforce. Utilizing statewide longitudinal data from the Texas P-20W system housed at the University of Houston Education Research Center, our analysis focuses on two graduating cohorts (2017–2018). The sample is restricted to on-time graduates who did not enroll in postsecondary education within two years, attended schools offering IBCs, and had observable employment in Unemployment Insurance wage reports.

The key variable examined is whether students earned a TEA-approved IBC upon graduation. We use TEA’s crosswalk to categorize IBCs as aligned or misaligned based on students' completed CTE programs, defined by completing three or more related courses, including at least one advanced (level 3 or 4) course.

We employ two analytical approaches: a baseline Ordinary Least Squares (OLS) regression model and a propensity score matching (PSM) method. The OLS model assesses annual earnings and employment likelihood, controlling for student demographics, CTE program indicators, high school, and cohort fixed effects. The analysis specifically differentiates between aligned and misaligned IBCs relative to graduates without an IBC. The complementary PSM analysis matches students based on observable characteristics without fixed effects.

Findings from our initial analysis (one year post-graduation) indicate significant positive economic associations for IBC earners in employment likelihood and salary. Crucially, these positive salary outcomes are predominantly driven by students whose IBCs align with their CTE program. Extended analyses up to five years post-graduation confirm consistent economic returns.

This research substantially informs state and national policy, particularly concerning direct-to-workforce high school graduates. With states increasingly integrating workforce metrics into accountability frameworks, understanding IBC effectiveness becomes vital. Our findings underscore the importance of credential alignment with coursework and local labor demands, emphasizing potential equity issues if alignment is neglected, particularly affecting under-resourced schools and regions lacking industry-aligned offerings. Ultimately, this highlights that credential acquisition alone is insufficient—meaningful alignment is critical for students to realize tangible economic benefits.

Authors

• Jacob Kirksey, Texas Tech University
  Presenting Author

• Jennifer Freeman, Texas Tech University
  Non-Presenting Co-Author

• Angela Crevar, Texas Tech University
  Non-Presenting Co-Author