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.