The Covid slide has both expanded the need for students to take remedial classes and produced greater familiarity with remote learning. As a result, online credit recovery options have become more necessary and readily accessible at the same time. But pre-Covid concerns that these courses don’t actually improve academic achievement persist. Now comes some timely research looking at the long-term labor market prospects of students who complete high school graduation requirements via online credit recovery. The results add more bad news to the pile.
Data come from a large, unnamed urban school district in the Midwest that began offering online credit recovery in 2010. The researchers started by identifying all of the nearly 12,000 district graduates from the 2010–11 to the 2017–18 school years who had failed at least one high school course. Using administrative records, the researchers identified those who recovered at least one of those lost credits via the district’s online vendor and defined them as the “treatment” group. Students who were identified as having retaken the failed course(s) in a traditional classroom setting were the control.
The final sample includes over 8,700 students in both groups whose education and employment records could be connected one year following graduation—5,154 in the treatment group and 3,559 in the control group. Black students were more likely to engage in online credit recovery in this district during the time period, as were students who were absent more frequently, had lower grade point averages, and earned fewer credits overall. White and Asian students, English learners, and those with disabilities were more likely to recover failed credits in traditional classrooms. The researchers identified a subsample of both groups whose employment data were available up to four years after high school graduation.
The researchers ran an instrumental variables estimation, which showed that, initially, students in the treatment group had earnings on par with those in the control group. Over time, however, a large negative differential emerged. By the fourth year post-graduation, students who recovered credits online were earning an average of almost $3,000 less annually than their peers who recovered credits traditionally. At the same time, there were no statistically significant differences in the likelihood of graduates in either group being employed or retaining employment. Thus the earnings gap was likely a case of lower wages and/or a slower rate of increase in earnings over time.
In discussion, the researchers note that the observed pattern fits with existing labor market research. A high school diploma is, in itself, a signal to employers about an individual’s work potential. And since high school transcripts do not specify how a course was passed or a credit earned, the same signal is sent by both groups’ diplomas. However, human capital theory insists that individual ability is gradually revealed over time in the labor market. If so, it seems that online credit recovery is a weaker preparation for work than more traditional means of remediating a failed course. (Although not having thousands of students failing courses during high school would be better than both of those options.) While we do not know how or why students sorted into the two credit recovery pathways, the researchers do caution that the continued expansion of online credit recovery could lead to a devaluation of all high school diplomas if its time-honored signal of work readiness is drawn into question in this manner.
SOURCE: Carolyn J. Heinrich and Huiping Cheng, “Does Online Credit Recovery in High School Support or Stymie Later Labor Market Success?,” Journal of Policy Analysis and Management (January 2022).
