The Effect of High School Exit Exams on Graduation, Employment, Wages and Incarceration - NBER Working Paper No. 19182

Sep 30, 2026

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Evaluates how high school exit exams influence high school graduation, incarceration, employment, and wages. Builds a state/graduation-cohort dataset from the Current Population Survey, Census, and exit-exam information, leveraging staggered adoption timing across states. Finds modest overall graduation effects and notable impacts on incarceration, with little change from exams testing below high-school academic skills. More challenging standards-based exams reduce graduation and raise incarceration, with about half the graduation loss offset by increased GED receipt, while employment and wage distributions show no consistent effects.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages40

Reading Time1 h 41 min

AccessFree to download

Abstract

Data and identification strategy

Main findings on graduation and incarceration

Evidence on employment and wage distribution

Paper organization

NBER WORKING PAPER SERIES THE EFFECT OF HIGH SCHOOL EXIT EXAMS ON GRADUATION, EMPLOYMENT, WAGES AND INCARCERATION Olesya Baker Kevin Lang Working Paper 19182 [http://www.nber.org/papers/w19182](http://www.nber.org/papers/w19182) NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 June 2013 We are grateful to Arias Wan whose undergraduate thesis started us on this project and to Claudia Olivetti, Daniele Paserman and participants in seminars and workshops at Boston University, Federal Reserve Bank of Chicago, American Institutes for Research, CNA, Abt Associates and the US Census for helpful comments. The usual caveat applies. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2013 by Olesya Baker and Kevin Lang. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. The Effect of High School Exit Exams on Graduation, Employment, Wages and Incarceration Olesya Baker and Kevin Lang NBER Working Paper No. 19182 June 2013 JEL No. I21,I24,I28,J24,J3 ABSTRACT We evaluate the effects of high school exit exams on high school graduation, incarceration, employment and wages. We construct a state/graduation-cohort dataset using the Current Population Survey, Census and information on exit exams. We find relatively modest effects of high school exit exams except on incarceration. Exams assessing academic skills below the high school level have little effect. However, more challenging standards-based exams reduce graduation and increase incarceration rates. About half the reduction in graduation rates is offset by increased GED receipt. We find no consistent effects of exit exams on employment or the distribution of wages. Olesya Baker Division of Health Policy Translation Brigham and Women's Hospital NH 304 75 Francis St., Boston, MA 02215 [obaker@bu.edu](obaker@bu.edu) Kevin Lang Department of Economics Boston University 270 Bay State Road Boston, MA 02215 and NBER [lang@bu.edu](lang@bu.edu) Twenty-five states, with nearly 70 percent of public school students, have high school exit exams (Center on Education Policy, 2012) . Typically, students who do not pass all portions of the highschool exit exam even after multiple attempts cannot obtain a high school diploma. This highstakes nature of exit exams has made them highly controversial. Proponents of high-stakes testing assert that exit exams raise achievement by motivating students and assure employers and colleges of the quality of high school graduates. However, critics argue that exit exams increase the dropout rate, narrow the curriculum, and withdraw attention from low-performing students whose achievements fall far short of the established standards. Most studies of high school exit exams find adverse effects on graduation rates, some positive effects on employment and no effect on mean wages. While replicating these findings except that we find no consistent employment effects, we broaden the range of outcomes to distinguish between GEDs and high school diplomas. We also examine different quantiles of the wage distribution and address incarceration. We use Current Population Surveys (CPS) and Census data to create a state/cohort panel and exploit the staggered timing of the implementation of exit exams across states. We include state and graduation cohort fixed effects to control for time-invariant characteristics of states and characteristics that affect all states but vary across graduating cohorts. In some specifications, we also include state-specific cohort trends. We fo

FAQs

What outcomes are examined in this working paper?

The paper evaluates effects on high school graduation, incarceration, employment, and wages.

How does the study measure the impact of exit exams across states?

It builds a state/graduation-cohort panel using CPS and Census data and exploits staggered implementation timing across states, including state and cohort fixed effects and robustness checks.

What are the key findings regarding standards-based exams and incarceration?

Standards-based exams are associated with lower graduation and higher incarceration rates; incarceration increases by about 0.2 percentage points (roughly 12.5%).

Do exit exams show consistent effects on employment or wages?

No consistent effects are found on employment or on the distribution of wages, including wage percentiles.

Sep 30, 2026

Upload by jayni