Does taking short postsecondary programs or independent credits benefit recently displaced workers?

Workers who experience a permanent layoff (a job loss not followed by rejoining the same firm in the current or subsequent year) are often affected financially for several years. Research has consistently shown that following a permanent layoff, earnings tend to decline sharply and remain below pre-layoff levels for several years. One approach to dealing with a permanent layoff is to reinvest in human capital by going back to school before returning to the labour market. Recent evidence suggests that only a small share of recently displaced workers enrol in postsecondary education, and among those who do, most tend to select short-term (i.e., non-degree), career-oriented programs or take a few credits that are not associated with a credential or program. This pattern may reflect the fact that many displaced workers may need to (and are able to) re-enter the workforce as soon as possible to pay bills and care for dependants. The current study, based on the Longitudinal Worker File, the Postsecondary Student Information System, the 2006 Census of Population and the T1 Family File, examines the extent to which enrolling in, or graduating from, short, career-oriented programs or taking independent credits is associated with more favourable post-displacement earnings patterns. The findings suggest that, compared with individuals who did not enrol in postsecondary education following a permanent layoff, individuals who graduated from a college or CEGEP certificate or diploma program after a job loss registered substantially larger percentage increases in annual earnings between one year before the layoff and five years after the layoff. The relative earnings increases were particularly large among individuals who graduated from short science, technology, engineering and mathematics (STEM) or health care programs. More moderate relative increases in earnings were registered by individuals who took independent credits. In contrast, graduates from a short non-STEM (except health care) program or a microcredential (a short program requiring only a small number of courses) after a job loss experienced no relative earnings gains. Graduates of microcredentials registered substantial earnings losses compared with individuals who did not enrol at all. Finally, displaced workers who enrolled in a short program from which they did not graduate experienced similar earnings trajectories as those who did not enrol at all.