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.

Who Benefits from Obtaining a GED? Evidence from High School and Beyond

This paper examines the value of the GED credential and the conventional high school diploma in explaining the earnings of 27-year-old males in the early 1990s. The data base is the High School & Beyond sophomore cohort. We replicate the basic findings of prior studies that implicitly assume the labor market value of the GED credential does not depend on the skills with which dropouts left school. We show that these average effects mask a more complicated pattern. Obtaining a GED is associated with higher earnings at age 27 for those male dropouts who had very weak cognitive skills as tenth graders, but not for those who had stronger cognitive skills as tenth graders.

The Growing Importance of Cognitive Skills in Wage Determination

Using data from two longitudinal surveys of American high school seniors, we show that basic cognitive skills had a larger impact on wages for 24-year-old men and women in 1986 than in 1978. For women, the increase in the return to cognitive skills between 1978 and 1986 accounts for all of the increase in the wage premium associated with post-secondary education. We also show that high school seniors' mastery of basic cognitive skills had a much smaller impact on wages two years after graduation than on wages six years after graduation.

Do Teacher Absences Impact Student Achievement? Longitudinal Evidence from One Urban School District

Rates of employee absences and the effects of absences on productivity are topics of conversation in many organizations in many countries. One reason is that high rates of employee absence may signal weak management and poor labor-management relations. A second reason is that reducing rates of employee absence may be an effective way to improve productivity. This paper reports the results of a study of employee absences in education, a large, labor-intensive industry. Policymakers' concern with teacher absence rests on three premises: (1) that a significant portion of teachers' absences is discretionary, (2) that teachers' absences have a nontrivial impact on productivity, and (3) that feasible policy changes could reduce rates of absence among teachers. This paper presents the results of an empirical investigation of the first two of these premises; it discusses the third premise. We employ a methodology that accounts for time-invariant differences among teachers in skill and motivation. We find large variation in adjusted teacher absence rates among schools. We estimate that each 10 days of teacher absences reduce students' mathematics achievement by 3.3 percent of a standard deviation.

Expanding School Enrollment by Subsidizing Private Schools: Lessons from Bogotá

Many countries use tax revenues to subsidize private schools. Whether these policies meet social objectives depends, in part, on the relative quality of education provided by the two types of schools. We use data on elementary school students and their teachers in Bogotá, Colombia to examine difference in resource mixes and differences in the relative effectiveness of public and private schools. We find that, on average, the schools in the two sectors are equally effective. However, they produce education using very different resource combinations. Moreover, there are large differences in the effectiveness of schools in both sectors, especially in the private sector. The results of our analysis shed light on the quantity-quality tradeoff that governments in many developing countries face in deciding how to use scarce educational resources.

How Performance Information Affects Human-Capital Investment Decisions: The Impact of Test-Score Labels on Educational Outcomes

Students receive abundant information about their educational performance, but how this information affects future educational-investment decisions is not well understood. Increasingly common sources of information are state-mandated standardized tests. On these tests, students receive a score and a label that summarizes their performance. Using a regression-discontinuity design, we find persistent effects of earning a more positive label on the college-going decisions of urban, low-income students. Consistent with a Bayesian-updating model, these effects are concentrated among students with weaker priors, specifically those who report before taking the test that they do not plan to attend a four-year college.

The Consequences of High School Exit Examinations for Struggling Low-Income Urban Students: Evidence from Massachusetts

The growing prominence of high-stakes exit examinations has made questions about their effects on student outcomes increasingly important. We take advantage of a natural experiment to evaluate the causal effects of failing a high-stakes test on high school completion for the cohort scheduled to graduate from Massachusetts high schools in 2006. With these exit examinations, states divide a continuous performance measure into dichotomous categories, so students with essentially identical performance may have different outcomes. We find that, for low-income urban students on the margin of passing, failing the 10th grade mathematics examination reduces the probability of on-time graduation by eight percentage points. The large majority (89%) of students who fail the 10th grade mathematics examination retake it. However, although we find that low-income urban students are just as likely to retake the test as apparently equally skilled suburban students, they are much less likely to pass this retest. Furthermore, failing the 8th grade mathematics examination reduces by three percentage points the probability that low-income urban students stay in school through 10th grade. We find no effects for suburban students or wealthier urban students.

Trends in the Black-White Achievement Gap:Clarifying the Meaning of Within- and Between-School Achievement Gaps

We decompose black-white achievement gap trends between 1971 and 2004 into trends in within- and between-school differences. We show that the previous finding that narrowing within-school inequality explains most of the decline in the black-white achievement gap between 1971 and 1988 is sensitive to methodology. Employing a more detailed partition of achievement differences, we estimate that 40 percent of the narrowing of the gap through the 1970s and 1980s is attributable to the narrowing of within-school differences between black and white students. Further, the consequences for achievement of attending a high minority school became increasingly deleterious between 1971 and 1999.

Do Financial Incentives Help Low-Performing Schools Attract and Keep Academically Talented Teachers? Evidence from California

This study capitalizes on a natural experiment that occurred in California between 2000 and 2002. In those years, the state offered a competitively allocated $20,000 incentive called the Governor's Teaching Fellowship (GTF) aimed at attracting academically talented, novice teachers to low-performing schools and retaining them in those schools for at least four years. Taking advantage of data on the career histories of 27,106 individuals who pursued California teaching licenses between 1998 and 2003, we use an instrumental variables strategy to estimate the unbiased impact of the GTF on the decisions of recipients to begin working in low-performing schools within two years after licensure program enrollment. We estimate that GTF recipients would have been less likely to teach in low-performing schools than observably similar counterparts had the GTF not existed, but that acquiring a GTF increased their probability of doing so by 28 percentage points. Examining retention patterns, we find that 75 percent of both GTF recipients and non-recipients who began working in low-performing schools remained in such schools for at least four years.

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

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