NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Estimating the Impact of the GED on the Earnings of Young Dropouts Using a Series of Natural Experiments

John H. Tyler, Richard J. Murnane, John B. Willett

NBER Working Paper No. 6391
Issued in February 1998
NBER Program(s):   CH   LS

The General Educational Development (GED) credential has become the primary 'second chance' route to high school certification for school dropouts in the United States. Despite the widespread use of the GED, however, bias due to self-selection has limited our knowledge about the effects of the credential on the labor market outcomes of dropouts. This paper uses a series of natural experiments created by interstate variation in GED passing standards to reduce self-selection bias in estimates of the impact of the GED on the earnings of young dropouts. To exploit the natural experiments, we use a unique merged data set containing the GED test scores and Social Security earnings of a sample of 16-21 year-old dropouts who attempted the GED in 1990. As a result of our research design and the fact that lower-scoring GED candidates receive very little post-secondary education, our results primarily measure the labor market signaling value of the GED. For dropouts who have indicated a desire to acquire the credential and whose skills place them on the margin of passing the GED exams, we find that acquisition of a GED increases the 1995 earnings of young white dropouts by 10-19 percent. These results are robust to experiments that use different treatment and comparison groups, and they withstand sensitivity analyses that explore possible violations of our identifying assumptions. We find no statistically significant evidence that the GED increases the earnings of young nonwhite dropouts, a result that we attribute to a

download in pdf format
   (3350 K)

email paper

This paper is available as PDF (3350 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w6391

Quarterly Journal of Economics (May 2000), forthcoming.

Users who downloaded this paper also downloaded these:
Heckman, Humphries, and Mader w16064 The GED
Arcidiacono, Bayer, and Hizmo w13951 Beyond Signaling and Human Capital: Education and the Revelation of Ability
Sacerdote w10894 What Happens When We Randomly Assign Children to Families?
Tyler and Lofstrom w13816 Is the GED an Effective Route to Postsecondary Education for School Dropouts?
Murnane, Willett, and Tyler w7172 Who Benefits from Obtaining a GED? Evidence from High School and Beyond
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us