The returns to higher education for marginal students: Evidence from Colorado Welfare recipients

• I estimate the impact of community college credits and credentials on welfare recipients’ labor market outcomes.
• All vocational certificates and degrees produce large earnings gains.
• Credits earned in the absence of credential receipt do not increase earnings or employment.
• Failure to account for sub-associate credentials results in falsely attributing positive earnings gains to college attendance in the absence of credential receipt.

I estimate the impact of community college credits and credentials on the labor market outcomes of several cohorts of current and former welfare recipients. Using an individual fixed effects approach, I find that women who attend college after entering welfare experience large and significant earnings gains. These returns are driven by credential receipt and when sub-associate’ s degree credentials are unobservable, positive earnings gains will be inappropriately attributed to college attendance alone.