GED Issues Brief #1

In March 1998 the Center for Impact Research (formerly Taylor Institute), along with Women Employed Institute, published a research report, (A Second Chance: Improving Chicago's GED Performance), detailing the low number of Chicagoans each year who either try for or pass the GED examination. GED, which stands for Tests of General Educational Development, is a 7.5 hour- test that enables adults who have not succeeded the first time around in school to obtain a high school equivalency certificate. The GED was developed in 1942 as a response to an emergency -- the return of World War II veterans who had not earned a high school diploma before they left to serve their country, and who faced economic hardship as a result.The report found that only 2.15% of those needing the GED took the test in Chicago in 1996. Chicago's percentage equals the national average, although higher percentages tried for the credential in three cities -- Philadelphia, Los Angeles, and Miami. However, only 64% of those who took the GED test passed in Illinois in 1996, ranking the state 42nd worst. Chicago's 46% pass rate considerably lagged behind the state rate and puts Chicago near the bottom when compared with ten major U. S. cities.In focus group discussions, Chicago adult literacy and job training groups were asked why more adults don't take and pass the GED in Chicago. The groups consistently sited four factors: length and inflexibility of most GED prep classes in Cook County; lack of up-front diagnostic information to help adults decide whether they are ready to take the test; long waits to take the GED test; and low number of accessible GED testing sites in Chicago, with no downtown Chicago site. A January 13, 1998 telephone call to the Cook County automated GED information system revealed that the next open test date at any of the Cook County GED test locations was more than a month away. Of these sites, only three were in the city itself. These were Daley College (75th and Pulaski), Olive-Harvey College (103rd and Woodlawn), and Wright College (Montrose and Narragansett), all sites in far-flung locations difficult to reach for many test-takers. At the closest site, Daley College, the wait was almost four months long

The GED

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.returns to education, GED, dropouts, graduation rate, noncognitive skills

Taking the Easy Way Out: How the GED Testing Program Induces Students to Drop Out

We exploit an exogenous increase in General Educational Development (GED) testing requirements to determine whether raising the difficulty of the test causes students to finish high school rather than drop out and GED certify. We find that a six point decrease in GED pass rates induces a 1.3 point decline in overall dropout rates. The effect size is also much larger for older students and minorities. Finally, a natural experiment based on the late introduction of the GED in California reveals, that adopting the program increased the dropout rate by 3 points more relative to other states during the mid-1970s.GED, dropout

Labor-market returns to the GED using regression discontinuity analysis

We evaluate the labor-market returns to General Educational Development (GED) certification using state administrative data. We develop a fuzzy regression discontinuity (FRD) method to account for the fact that GED test takers can repeatedly retake the test until they pass it. Our technique can be applied to other situations where program participation is determined by a score on a retake-able test. Previous regression discontinuity estimates of the returns to GED certification have not accounted for retaking behavior, so these estimates may be biased. We find that the effect of GED certification on either employment or earnings is not statistically significant. GED certification increases postsecondary participation by up to four percentage points for men and up to eight percentage points for women

Measuring the Returns to the GED : Using an Exogenous Change in GED Passing Standards as a Natural Experiment

In this paper, we exploit an exogenous change in the passing standard required to obtain a General Educational Development (GED) credential to identify the impact of the GED on the quarterly earnings of male dropouts, utilizing the Texas Schools Micro Data Panel (TSMP). These unique data contain demographic and GED test score information from the Texas Education Agency linked to pre- and post-test taking Unemployment Insurance quarterly wage records from the Texas Workforce Commission. Comparing Texas dropouts who acquired a GED before the passing standard was raised in 1997 to dropouts with the same test scores who failed the GED exams after the passing standard hike, we find no evidence of a positive ?GED effect? on earnings. The finding of no significant difference in pre-test taking earnings between the treatment and control group support the validity of the natural experiment. Our results are robust to a number of specifications and sub-samples of our general sample population of 16-40 year old males

Modeling the signaling value of the GED with an application to an exogenous passing standard increase in Texas

In this paper we develop a simple model of the signaling value of the GED credential. The model illustrates necessary assumptions for a difference-in-difference estimator, which uses a change in the GED passing standard, to yield unbiased estimates of the signaling value of the GED for marginal passers. We apply the model to the national 1997 passing standard increase which affected GED test takers in Texas. We utilize unique data from the Texas Schools Micro Data Panel (TSMP) which contain demographic and GED test score information from the Texas Education Agency linked to pre- and post-test taking Unemployment Insurance quarterly wage records from the Texas Workforce Commission. Comparing Texas dropouts who acquired a GED before the passing standard was raised in 1997 to dropouts with the same test scores who failed the GED exams after the passing standard hike, we find no evidence of a positive GED signaling effect on earnings. However, we find some evidence which suggest that our finding may be due to the low GED passing threshold that existed in Texas for an extended period

Labor-Market Returns to the GED Using Regression Discontinuity Analysis

In this paper, we evaluate the labor-market returns to General Educational Development (GED) certification using Missouri administrative data. We develop a fuzzy regression discontinuity (FRD) method to account for the fact that GED test takers can repeatedly retake the test until they pass it. Our technique can be applied to other situations where program participation is determined by a score on a "retake-able" test. Previous regression discontinuity estimates of the returns to GED certification have not accounted for retaking behavior, so these estimates may be biased. We find that the effect of GED certification on either employment or earnings is not statistically significant. GED certification increases postsecondary participation by up to four percentage points for men and up to eight percentage points for women

Do the Cognitive Skills of School Dropouts Matter in the Labor Market?

Does the U.S. labor market reward cognitive skill differences among high school dropouts, the members of the labor force with the least educational attainments? This paper reports the results of an exploration of this question, using a new data set that provides information on the universe of dropouts who last attempted the GED exams in Florida and New York between 1984 and 1990. The design of the sample reduces variation in unmeasured variables such as motivation that are correlated with cognitive skills. We examine the labor market returns to basic cognitive skills as measured by GED test scores. We explore whether the returns differ by gender and race. The results indicate quite large earnings returns to cognitive skills for both male and female dropouts, and for white and non-white dropouts. The earnings payoff to skills increases with age.