Estimating the Returns to Professional Certifications and Licenses in the U.S. Manufacturing Sector

This study uses recently released Current Population Survey microdata to estimate the earnings premium associated with professional certification and licenses. The author finds that full-time manufacturing workers with a certification or license earn close to $200 more in median weekly earnings compared to those without. However, this does not account for differences in pay that are associated with worker endowments, such as education and gender. A Blinder–Oaxaca decomposition is used to distinguish the portion of the earnings gap that is attributable to the credential from the portion associated with endowments. Endowments explain 62% of the total earnings gap, meaning that the actual returns to a certification or license are closer to $70 per week. The author also finds that workers with no high school or college education receive a relatively larger increase in weekly earnings, compared to those with more advanced degrees.