Labor market data’s role as states seek to ensure that their growing investments in nondegree credentials pay off. Also, Texas collects information on “credentials of value” amid a funding boom for two-year colleges, and the often ad hoc approach by colleges to using labor market information.

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A weekly newsletter about the intersection of education and work. By Paul Fain

The Big Nondegree Experiment

Solid information about the labor market is essential for determining whether a nondegree credential is worthy of state investment. That means knowing whether jobs pay living wages and are in high demand, which won’t get any easier as AI reshapes and eliminates job roles.

The National Skills Coalition has been working with 11 states to help them identify, measure, and track quality nondegree credentials. The nonprofit recently released a report on the multiyear project, which includes a focus on equity and seeks to help states ensure that short-term credentials pay off for students and taxpayers.

“While state investments in nondegree credentials are accelerating faster than the concept of tying that funding to rigorous quality assurance frameworks, we are seeing progress (if slow),” says Lindsey Reichlin Cruse, a senior fellow at the coalition and a co-author of the report.

The group says Minnesota is a standout for its ambitious approach to collecting data about nondegree programs and linking it to performance standards for programs and education providers.

While Texas wasn’t one of the 11 states included in the report, the state also is at the forefront of this work. A nearly $700M infusion of funding for Texas community colleges is tied to outcomes measures, including standards for “credentials of value” based on data about wages and occupations (see the below article).

“It’s a big experiment,” says Jacob Fraire, president of the ECMC Foundation, who formerly led the Texas Association of Community Colleges. “How do you ensure that it’s a quality credential, even if it’s noncredit?”

Several states, including Alabama, Louisiana, Ohio, and Virginia, are using criteria on in-demand jobs to help determine the quality of credentials and programs, the coalition found. They typically use a mix of information to determine what’s in demand, Reichlin Cruse says, including current labor market data and future projections.

To improve the accuracy of their measuring in-demand jobs, she points to recommendations from the Education Strategy Group. For example, the group calls for a balanced collection of primary and secondary sources, including both real-time and lagging labor market data.

However, states still find it challenging to forecast changing demands in the job market, Reichlin Cruse says. And education providers often struggle to be nimble enough to design and offer credentials to meet them. They also may worry whether businesses will respect the credentials, for good reason.

“It is important to distinguish between states being able to identify in-demand jobs accurately and employers being open to hiring people with nondegree credentials to fill them,” says Reichlin Cruse.

She cites an example from a large community college, which tapped employers to help with content creation, to verify that there was demand for the credential and that it was aligned to jobs. Yet the college watched graduates of those validated programs not get hired by the very employers that participated in designing them.

“What CEOs say versus what HR managers do is part of this disconnect,” says Reichlin Cruse.

Credentials of Value in Texas

The new law in Texas authorizing $683M in performance-based funding for community colleges was part of a roughly 23% increase in the state’s biennial contribution to the sector, to $2.2B from $1.8B.

Incentives for two-year colleges that are baked into the budget boost, as well as the development of data systems and a meaningful seat for employers at the table, have observers feeling optimistic that the new funding formula will help ensure the value of college credentials.

Data collection for the accountability measures will include wage and occupation information for graduates of certificate and certification programs as well as degrees. It even will cover students who complete a few courses before taking licensing exams to become electricians or plumbers, says Renzo Soto, a policy adviser for Texas 2036, a nonprofit policy group.

Put simply, the formula will allocate funds to colleges for each credential students earn, if it has a proven workforce value.

While the implementation process for the new law will take time, Soto, a former staff member in the state’s House of Representatives, says he’s confident that no types of credentials will slip through the cracks of the state’s data-collection infrastructure, including noncredit ones.

“We’ll know if an individual is in a specific occupation” and whether the credential they earned is in that field, Soto says. He predicts that Texas will be able to “regularly and automatically determine what is a credential of value.”

ECMC’s Fraire says the Texas Higher Education Coordinating Board and the Texas Workforce Commission have been working together for years to create the policy and data underpinnings for the new funding formula. Those efforts led to precedents like a $15M discretionary grant program for short-term, industry-aligned education and training programs, with requirements for data collection and employer participation.

While he thinks the experiment on credentials of value has big potential, Fraire says it also comes with risks. In particular, he says the state must be vigilant to not regress to two systems of postsecondary education, where underserved student groups are tracked into lower-value short-term programs.

The Kicker: “Even as we prove that there is efficacy in these nondegree credentials,” says Fraire, “we have to prove that it is equitable.”


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An Ad Hoc Approach to Data

Most colleges now use labor market data to inform at least aspects of their work, but institutional support—in the form of funds, staff, and clear policies—is often lacking, according to a new report from the Education & Employment Research Center at Rutgers University.

The Big Idea: That means colleges’ efforts to understand and respond to the labor market are often ad hoc.

  • Only 17% of respondents said their institution had clear policies or practices around using labor market data, and professional development and dedicated staff were also relatively rare.
  • Just 20% of institutions were capable of doing comprehensive collection and analysis, though a plurality did some additional analysis beyond required reporting.

The stakes are high, as both seismic shifts in the economy and student demand are forcing colleges to pay more attention to sought-after skills and the job market.

“Interest in these data is rising along with increased emphasis in higher education on making better linkages to careers for students,” says Michelle Van Noy, director of the center and a co-author of the report.

Two-year institutions lead the way in using labor market data and providing institutional support for that work across almost every major category the researchers looked at. That speaks to both community colleges’ long-standing workforce missions and the fact that federal, state, and private funding in that sector often requires more reporting on job alignment than it does in the four-year sector.

Federal policy, in particular the Perkins Career and Technical Education Acthas had a much bigger impact on community colleges’ data use than the researchers anticipated.

“We expected to see some difference between two-year and four-year colleges, but the ways in which Perkins has driven labor market information use in one sector of higher education was noteworthy,” says Monica Reid Kerrigan, a co-author of the report and a professor of educational leadership, administration, and research at Rowan University.

Among four-year institutions, the researchers found, there is both less external pressure to use labor market data and more internal resistance.

The Details: The findings come from a survey of more than 400 college representatives, mostly in senior administrative roles, at both two-year and four-year institutions, as well as deeper interviews with 10 case study institutions. Colleges were most likely to use federal and state data sources, but more than three-quarters also used regional data, and half used data from vendors.

Colleges, of course, are not monoliths—with different functions using data to varying degrees.

  • Labor market data played a role in new program development at nine in 10 colleges surveyed.
  • Likewise, three-quarters of colleges used economic data in program reviews, and not just in a perfunctory way.

For example, one participant at a four-year institution said that it recently eliminated 13 programs due to declining market trends or poor postgraduation outcomes. Southern New Hampshire University has gone even further, with one of the most extensive skills-mapping efforts the researchers found.

“There is an important link between skills and the workforce,” says Kim Bogle Jubinville, the university’s senior vice president and chief academic officer. “Employers understand the terminology of skills, and adding a framework of skills within our credit courses and degrees provides a level of transparency and clarity.”

Beyond program development, the researchers found, other critical functions are still in a nascent stage of using economic data.

  • Just 44% of institutions use labor market data in advising, and when they do, it’s most often left up to individual counselors.

Standout institutions, like Lurleen B. Wallace Community College and Lansing Community College, are using labor market data to help students connect career interests to jobs or to drive home the importance of getting hands-on experience. But, in general, interviewees talked about how few best practices exist.

Jobs and wage data should also factor more prominently in discussions of equity in higher education, Van Noy says. Just 28% of institutions currently use labor market data to understand how different groups of students fare—despite an increasing focus on equity and economic mobility.

The Kicker: “This is at the heart of understanding equitable outcomes,” she says. — Elyse Ashburn

Open Tabs

Industrial Policy
“We will create a half million jobs in this industry in this country” if the CHIPS Act is successful, Gina Raimondo, the U.S. secretary of commerce, said at an AEI event, where she called for semiconductor companies to be creative with apprenticeships and recruiting in high schools. “There will be jobs for folks that have a high school degree and a credential, a two-year degree, a four-year degree, a Ph.D.,” Raimondo said during a separate discussion hosted by Handshake.

Workforce Development
The U.S. spends one-fifth of the per-capita OECD average on job search assistance, training, relocation for displaced workers, apprenticeships, and employment subsidies, with just 0.1% of its GDP going toward those programs, David Deming, an economist and professor at Harvard University, writes in his new newsletter. Deming also describes a Danish education subsidy for injured workers that could be a workforce education model for the U.S.

Cyber Skills
The Biden administration released a cybersecurity workforce and education strategy in a new report from the Office of the National Cyber Director. The wide range of recommended strategies for closing huge employment gaps in the industry includes broader adoption of competency-based education, learner and employment records, skills-based hiring, and bolstering diversity through the administration’s Good Jobs Principles.

Tech and Careers
Citing rapid changes that tech, automation, and AI are bringing to careers, JPMorgan Chase & Co.’s PolicyCenter released recommendations for updating the Higher Education Act, the Workforce Innovation and Opportunity Act, and the National Apprenticeship Act. The bank called for Pell Grants to be extended to short-term programs, incentives for colleges to partner with industry, and more flexibility with competency-based education.

Learner Records
North Dakota has begun offering high school students a digital wallet to store verifiable transcripts, diplomas, and other credentials, reports Aaron Gifford for Government Technology. The blockchain-based digital wallets are available through the North Dakota Education Portal. They are designed to help students share their credentials—including links to standards and skills—with colleges and employers, which the state hopes will sign on to the project.

Noncredit Connections
Six new briefs describe how community colleges are working to better connect their credit and noncredit divisions through participation in a project from the Education Strategy Group and the Association of Community College Trustees. For example, the University of Hawaii Community Colleges are creating unique identifiers for all learners enrolled in noncredit programs, which will show which students later enroll in for-credit coursework.

Degree + Microcredentials
The University of Texas system is expanding its partnershipwith Coursera’s Career Academyto offer free industry-recognized microcredentials to more than 240K students, as well as faculty, staff, and alumni. The move makes UT’s program the largest of its kind at a U.S. institution. The system rolled out a pilot of the program late last year, and 3K students have since participated.

Free MicroBachelors
2U’s edX and Jobs for the Future have partnered to offer adult learners free access to three MicroBachelors programs, which lead to stackable, credit-backed certificates. The Charles Koch Foundation will cover costs for 500 students over three years and will support an efficacy study from JFF. 2U also released its annual outcomes report, with information on edX and 2U’s roughly 200 tech bootcamps and 68K all-time bootcamp graduates.

Job Moves
Lexi Barrett is the new chief of staff for the U.S. Department of Education. Barrett worked on the Biden administration’s transition team and as a senior adviser at the department. She previously was an associate vice president at Jobs for the Future.

The National Governors Association is hiring a program director for workforce development and economic policy. That post previously was held by Rachael Stephens Parker, who stepped down last week.

I’m back in your inbox after a two-week vacation. I hope you all also get some time off this summer. Please consider supporting our work to reach 5K influential readers who care about the intersection of education and the workforce.

A veteran higher education journalist and analyst, Paul focuses on the connections between education and the American workforce.