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

Sep 14, 2026

The General Educational Development (GED) credential serves as the main “second chance” path to high school certification for U.S. school dropouts, yet self-selection biases have limited causal estimates of its effects on labor-market outcomes. This paper uses interstate variation in GED passing standards to construct natural experiments, leveraging merged GED test score and Social Security earnings data for 16–21 year-old dropouts attempting the GED in 1990. Results focus on the GED’s signaling value, showing 1995 earnings gains for young white dropouts and no statistically significant increase for young nonwhite dropouts.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages72

Reading Time3 h 1 min

AccessFree to download

Abstract

Introduction

Research Design and Data

Findings on Earnings Impacts

Robustness and Sensitivity Analyses

Discussion of Programmatic Effects

ESTIMATING THE IMPACT OF THE GEDON THE EARNINGS OF YOUNG DROPOUTSUSING A SERIES OF NATURALEXPERIMENTS John H.TylerRichard J.MurnaneJohn B.Willett Working Paper 6391 NBER WORKING PAPER SERIES ESTIMATING THE IMPACT OF THE GEDON THE EARNINGS OF YOUNG DROPOUTSUSING A SERIES OF NATURALEXPERIMENTS John H.TylerRichard J.MurnaneJohn B.Willett Working Paper 6391http://www.nber.org/papers/w6391 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts AvenueCambridge,MA02138February 1998 We gratefully acknowledge the research support provided by the National Center for the Study ofAdult Learning and Literacy(NCSALL)**and the Rockefeller,Russell Sage and SpencerFoundations.The first author is grateful to Jeffrey Kling for many helpful conversations thatcontributed to this work,to Joshua Angrist,Lawrence Katz,and Carline Minter Hoxby for theirparticular insights that pushed the work forward,to participants at the NBER Summer Institute LaborStudies workshop,the Harvard Labor Economics Seminar,and the MIT Labor/Public EconomicsSeminar for helpful comments,and to numerous state GED-program directors and practitioners fortheir willingness to share their knowledge and experience.Special thanks go to Janet Baldwin ofthe GED Testing Service of the American Council on Education,Linda Headley Walker of the StateEducation Department of New York,Leslie Averna of the Connecticut Department of Education,and John Sojat of the Florida Department of Education for their assistance in providing data on GEDtesters,and to personnel of the Office of Research and Statistics at the Social SecurityAdministration's Baltimore Headquarters,particularly Peter Wheeler and Russell Hudson,forproviding and assisting with Social Security earnings data.The support of these individuals andorganizations does not imply their endorsement of the contents of this paper. **Work supported by NCSALL was supported under the Educational Research and Development Centers Program,Award Number R309B60002,as administered by the Office of Educational Research and Improvement/National Instituteon Postsecondary Education,Libraries,and Lifelong Learning,U.S.Department of Education.The contents do notnecessarily represent the positions or policies of the National Institute on Postsecondary Education,Libraries,andLifelong Learning,the Office of Educational Research and Improvement,the U.S.Department of Education,or theNational Bureau of Economic Research,and you should not assume endorsement by the Federal Government. ◎ 1998 by John H.Tyler,Richard J.Murnane and John B.Willett.All rights reserved.Shortsections of text,not to exceed two paragraphs,may be quoted without explicit permission providedthat full credit,including ◎notice,is given to the source. # Estimating the Impact of the GED on the Earningsof Young Dropouts Using a Series of NaturalExperiments John H.Tyler,Richard J.Murnane and John B.WillettNBER Working Paper No.6391February 1998JEL No.J1 John H.Tyler Harvard Graduate Schoolof Education 6 Appian WayCambridge,MA 02138tylerjo@hugse1.harvard.edu # ABSTRACT The General Educational Development (GED)credential has become the primary "secondchance”route to high school certification for school dropouts in the United States.Despite thewidespread use of the GED,however,bias due to self-selection has limited our knowledge about theeffects of the credential on the labor market outcomes of dropouts.This paper uses a series ofnatural experiments created by interstate variation in GED passing standards to reduce self-selectionbias in estimates of the impact of the GED on the earnings of young dropouts.To exploit the naturalexperiments,we use a unique merged data set containing the GED test scores and Social Securityearnings of a sample of 16-21 year-old dropouts who attempted the GED in 1990.As a result of ourresearch design and the fact that lower-scoring GED candidates receive very little post-secondaryeducation,our results primarily measure the labor market si

FAQs

Why does the paper use natural experiments to study the GED’s impact?

Interstate variation in GED passing standards creates natural experiments that reduce self-selection bias in estimating the credential’s labor-market effects.

What data does the study use for its analysis?

A merged dataset combines GED test scores and Social Security earnings for a sample of 16–21 year-old dropouts who attempted the GED in 1990.

What are the main earnings results for young dropouts who obtain a GED?

For young white dropouts on the margin of passing, acquiring a GED increases 1995 earnings by about 10–19 percent; the paper finds no statistically significant earnings increase for young nonwhite dropouts.

Sep 14, 2026

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