Education, Certification, and the Earnings of Industrial Accountants

Utilizing a model of the relationship between skill accumulation and earnings known as human capital theory, we analyzed the incremental earnings associated with various educational and professional credential for a sample of members of the National Association of Accountants (NAA). Data were collected by means of a questionnaire survey of NAA members and were analyzed utilizing a multiple regression technique. Earnings is regressed on various education and certification variables. Employment characteristics and personal characteristics of the respondents are included as control variables. Our analysis documents positive earnings increments for the bachelor’s and MBA degrees and the CPA certificate. For the MBA and CPA, these returns are concentrated in the middle and later stages of accountants’ careers. Also, we examine the variation in these returns across different subgroups of our sample. Individuals in finance positions have more responsibility and are more upwardly mobile than those in traditional accounting jobs. Prior experience in public accounting is found to be a partial substitute for the above credentials. Finally, the credentials generated more consistent returns in smaller firms