James J. Heckman, John Eric Humphries, Nicholas S. Mader

NBER Working Paper No. 16064
Issued in June 2010, Revised in December 2011
NBER Program(s):Children, Economics of Education, Labor Studies, Public Economics

The General Educational Development (GED) credential is issued on the basis of an eight hour subject-based test. The test claims to establish equivalence between dropouts and traditional high school graduates, opening the door to college and positions in the labor market. In 2008 alone, almost 500,000 dropouts passed the test, amounting to 12% of all high school credentials issued in that year. This chapter reviews the academic literature on the GED, which finds minimal value of the certificate in terms of labor market outcomes and that only a few individuals successfully use it as a path to obtain post-secondary credentials. Although the GED establishes cognitive equivalence on one measure of scholastic aptitude, recipients still face limited opportunity due to deficits in noncognitive skills such as persistence, motivation and reliability. The literature finds that the GED testing program distorts social statistics on high school completion rates, minority graduation gaps, and sources of wage growth. Recent work demonstrates that, through its availability and low cost, the GED also induces some students to drop out of school. The GED program is unique to the United States and Canada, but provides policy insight relevant to any nation's educational context.

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Document Object Identifier (DOI): 10.3386/w16064

Published: “The GED,” (with J. E. Humphries and N. S. Mader). In, E. A. Hanushek, S. Machin, and L. W ̈ oßmann (eds.) Handbook of the Economics Of Education, Volume 3 . Amsterdam: North-Holland. pp. 423-484. (2011).

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