Variable Impacts of New Credentials for the Older Worker

Several factors may deter older workers (age 50+) from pursuing training. Some might question the return on investment for new skills and credentials as one approaches traditional retirement ages. Others likely feel extreme anxiety about reentering the classroom after decades away from educational institutions. Paying tuition can be a challenge at any age, and the financial implications of taking time out of the labor market to pursue training are perhaps more severe for adults with mortgages and other fixed expenses. On the employer’s side, stereotypes and prejudices likely exist concerning older workers’ abilities to absorb new knowledge and learn new skills, thus discouraging managers from supporting investments in human capital. Similarly, older workers may fear that even if they obtain a new credential in support of a career change, ageism may hamper their ability to find new jobs in which they would use their upgraded skillsets.

Workcred used the Participant Individual Record Layout (PIRL) files published by the Employment and Training Administration with the U.S. Department of Labor due to the availability of rich data on the entire population of individuals who obtained training through a WIOA program (the Workforce Innovation and Opportunity Act of 2014) to examine the impact of credentials on reemployment for older workers.

While the population of workers who access WIOA training is not representative of the overall older worker population, the analysis presented in the report offers insight into the variable economic value of different types of new credentials for older workers. The analysis focuses on the 50+ population that is eligible for the WIOA Adult or WIOA Displaced Worker programs because of significant barriers to employment, including workers who were displaced, previously underemployed, or out of work for reasons that do not qualify for unemployment insurance.

Data Analysis on New Credentials for Older Workers

First, the data clearly suggest that new credentials are valuable to older workers when seeking employment after displacement, with nondegree credentials having the most value for older workers. The value of new credentials holds true across demographics such as gender and veteran status as well as occupational training choice. Interestingly, older veterans who completed WIOA-funded training programs benefited from new credentials more than a typical older worker.

While age 50+ workers pursue credentials in varying fields even with WIOA support, they tend to cluster in certain occupational fields of study. Motor vehicle operators, computer occupations, health technologists and technicians, operations specialties managers, and home health aides and nursing assistants are the top five study categories.

Nondegree credentials were the most popular choice for older workers and offered the highest labor market returns across all occupations. Certifications and industry-recognized certificates were found to have similar completion rates compared with all credentials, and they had higher reemployment rates and higher post-training earnings. One reason for the popularity of this credential choice could be that certifications and industry-recognized certificates are generally known to have shorter completion times than degree and apprenticeship programs. Another conjecture is that these shorter-term credentials are more skill-oriented to demonstrate what an individual can do.

Interestingly, community college certificates did not result in the same labor market value, suggesting that credentials developed by or in conjunction with employers may be more useful or valuable to older workers than credentials delivered in an academic setting. Similarly, while bachelor’s degrees had higher earnings for older workers who earned them, they had lower reemployment rates than certifications and industry-recognized certificates for older workers and typically take many years to earn.

Despite having similar completion rates for WIOA-funded training programs as younger workers, older workers had slightly lower reemployment rates and post-training earnings relative to their younger counterparts. Both groups (older and younger workers) showed decreased earnings following displacement, regardless of occupation. These findings are consistent with previous studies.

Reemployment and earnings gaps between older workers and younger workers varied by occupation. In general, office and administrative occupations seem to have larger reemployment and earnings gaps between older and younger workers, while those in IT and health care had smaller ones. Not surprisingly, these gaps were also larger in occupations that involve manual labor, such as construction trades.

Similarly, although the differences in reemployment rates, completion rates, and credential choices found in this analysis cannot be generalized to all older workers earning new credentials, this analysis strongly suggests that there are differences in the economic value of various types of new credentials and that those differences may vary for older worker than for younger workers.

Recommendations for Improving the Credentialing System to Support Older Workers

The recommendations that emerged from the study are derived from the analysis as well as best practices for improving the credentialing system to support workforce quality. Although the results should not be considered reflective of all older workers who pursue upskilling and/or reskilling opportunities, they do provide valuable information that can be used as the basis for additional research.

  • More research is needed on the value of earning new credentials for older workers
  • Stakeholders must share data to better understand the impact of new credentials
  • Stakeholders must support and engage with federal data collection efforts
  • More research is needed to understand how WIOA programs can better serve older workers

Read the full report, “Variable Impacts of New Credentials for the Older Worker,” on Workcred’s website.

See also related news item, “Credentials for Workers Over 50: Workcred Debuts New Report.”

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