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Are Online Certificates Beneficial To Your Career?

Over the last decade, many online education companies have sprung up, including programs like Coursera, Udacity, edX, and some large universities. Whether to get a formal education from top educators, or to simply brush up on specific skills, these online classes offer valuable educational opportunities for people around the world. Yet a central question remains - do they actually help people get jobs?

Revelio Labs

11/3/20

Over the last decade, many online education companies have sprung up, including programs like Coursera, Udacity, edX, and some large universities. Whether to get a formal education from top educators, or to simply brush up on specific skills, these online classes offer valuable educational opportunities for people around the world. Yet a central question remains - do they actually help people get jobs?

In theory, the value of a certificate comes from two sources: (i) the signal it sends to the market and (ii) the skills taught.

The signal a credential provides should have an immediate premium over those who don’t have it. And this premium should deteriorate over the course of someone’s career. Skill accumulation, on the other hand, should be the gift that keeps giving, with a positive impact on seniority and promotion rates over time.

By looking at the seniority of those who have online certificates and compare them to those who do not, we see a very surprising trend. As it turns out, in the very beginning of a career, there is a persistent negative premium from online certificates, that only grows to be positive after several years.

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Takeaways:

  • The primary benefit of online education appears to be the education itself, not the credentials. Considering that the common business model for online courses is to offer courses for free but charge for a formal certificate, we think this is quite an important distinction.
  • Certification may be pursued more by those with worse career prospects, which would explain why early-career seniority is significantly lower for those who get certified than those who don’t.
  • Online certificates become less and less useful as formal education credentials increase. Bachelor degree holders benefit the most, while PhD holders benefit the least.

If you have any ideas of other metrics to track or would like to hear more, please feel free to reach out.

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