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Focus On Policy

Is the GED Valuable to Those Who Pass it?

Research consistently shows that high school graduates do better in the labor market than do holders of the General Educational Development (GED)credential1. But do high school dropouts who get the GED fare better economically than  dropouts who don't get their GED? According to NCSALL research conducted  by Brown University's John Tyler (see About the Research), acquisition of a GED can have a substantial impact on earnings for some school dropouts. Tyler presents three specific research findings:

Finding #1: Economic benefits associated with the GED seem to accrue only to low-skilled high school dropouts, defined by Tyler as those who left school with low skills or who passed the GED but with very low scores. 

The GED provides different economic payoffs to high school dropouts depending on their level of academic skills at the time they left school.  For low-skilled dropouts, Tyler's research shows substantial economic gains associated with the GED. These GED holders earn anywhere from 5 to 25 percent more than similar dropouts without a GED. However, the research found no economic benefits for GED holders who left school with higher-level academic skills.

Tyler's report suggests that the GED leads to better labor market outcomes through three mechanisms:

Finding #2: Economic benefits associated with a GED appear over time rather than immediately upon receipt of the credential.

Research by Tyler and others has found that the financial benefits associated with the GED appear over time. Three recent studies2 concluded that there is no statistically significant difference in earnings between low-skilled GED holders and uncredentialed dropouts after one year. After five years, however, the earnings difference became statistically significant. One study3 found that, for women, the predicted annual earnings gain associated with the GED in the first year after obtaining the credential was about $300, but seven years after obtaining a GED, the earnings gain was about $1,300. Tyler's own study4 found little difference in income after one year but found that about five years after acquiring the GED, recipients earned $1,200 more per year. Tyler found that, in general, GED holders earn about 15 percent more than non-GED school dropouts five years after obtaining a GED. 

Finding #3: Since few GED holders go on to postsecondary education, few benefit from the advantages associated with further education and training, but the gains resulting from postsecondary education and training are as great for GED holders as they are for high school graduates.

The acquisition of a GED leads to a greater probability of obtaining postsecondary education or training, and wages increase for GED holders who pursue further education.5 However, only 12 percent of male GED holders complete at least one year of college, only three percent obtain an Associate's Degree, and only 18 percent obtain any on-the-job training.6 

Policy Implications
These findings on the GED have the potential for contributing to educational policy. For example, the following are implications that could be drawn from the research articles cited above:7

About the Research

What Do We Know About the Economic Benefits of the GED: A Synthesis of the Evidence from Recent Research, by John Tyler, Brown University and National Bureau of Economic Research, August 2001

In this article, Tyler reviews all of the recent research on the relationship between earnings and the GED, including three of his own studies. One of his studies used a "natural experiment" design, based on the differing GED pass criteria between different states. Tyler's studies used either unemployment insurance information, Social Security earnings, or self-reported income as the dependent variable. Across the studies, multiple statistical analyses were utilized to determine the factors that influence benefits of the GED. The full text of Tyler's article is available online.

The GED Reduces Recidivism, Saves Money, and Reduces Crime

By Steve Steurer,
Correctional Education Association

Multiple studies in the last 10 years have shown that educating prisoners reduces the likelihood of return to prison. Data from these studies consistently show that educated former inmates commit fewer crimes after release.

  • A Federal Bureau of Prisons study1 concluded that "recidivism rates were inversely related to educational program participation while in prison." The more education completed, the lower the recidivism, even after controlling for age and prior criminal history.

  • A recent study2 of over 3,000 ex-offenders for three years after release found the overall drop in recidivism for educational participants was about 29 percent. According to the Correctional Education Association, a 29 percent drop in re-incarceration saves $2.00 in correction costs for every $1.00 spent on prison education. Additional savings are made in reduced police and court costs.

1   Harer, M. (1995). Recidivism among federal prisoners released in 1987. Journal of Correctional Education. 46(3), 98-128, cited from LoBuglio, Stefan (2001). Time to Reframe Politics and Practices in Correctional Education, from Comings, J., Garner, B., and Smith, C (eds), Annual Review of Adult Learning and Literacy, Vol. 2, pps. 111-150. San Francisco, CA: Jossey-Bass Publishers.
2   Steurer, S., Smith, L., and Tracy, A. (2001). Three State Recidivism Study. Lanham, MD: Correctional Education Association, 63 pps.


  1. Cameron, S.V. & Heckman, J.J.  (1993) The Nonequivalence of High  School Equivalents, Journal of Labor Economics, 11(1), 1-47.

  2. Boesel, D., Alsalam, N., and Smith, T., (1998). Educational and Labor Market Performance of GED Recipients. Washington, DC: Office of Educational Research and Improvement, Department of Education. National Library of Education Research Synthesis. 
    Murnane, R.J., Willett, J.B., and Boudett, K.P., (1999). Do male dropouts benefit from obtaining a GED, postsecondary education, and training? Evaluation Review 22, no. 5: 475-502.
    Tyler, J.H. (2001). So you want a GED? Estimating the impact of the GED on the earnings of dropouts. Cambridge, MA: NCSALL.

  3. Boudett, K.P. (2000). "Second chance" strategies for women who drop out  of school. Monthly Labor Review, December: 19-31.

  4. Tyler, 2001, ibid.

  5. Murnane, et al., 1999, ibid.

  6. Murnane, et al., 1999, ibid.

  7. The following policy implications are the thoughts of the author of this article and do not necessarily represent the views of the researcher (John Tyler).

  8. In October 2000, there were 3.8 million 16- through 24-year-olds who were not enrolled in a high school program and had not completed high school (status dropouts), accounting for about 10.9 percent of the 34.6 million people in this age group, according to the National Center for Education Statistics report "Dropout Rates in the United States: 2000"

  9. NCES, 2000, ibid. 

  10. Levenson, A.R., Reardon, E., and Schmidt, S.R. (1999). Welfare, jobs and basic skills: The employment prospects of welfare recipients in the most populous U.S. counties. The Impact of Welfare Reform on Adult Literacy Education. Boston, MA: NCSALL Report #10

  11. The Workforce Investment Act of 1998 is the legislation under which federal adult education and family literacy services are currently funded. Reauthorization of WIA is scheduled for 2003.

  12. The other two "core indicators of performance" under WIA are: (1) Demonstrated improvements in literacy skill levels in reading, writing, and speaking the English language, numeracy, problem solving, English language acquisition, and other literacy skills, and (2) Placement in, retention in, or completion of, postsecondary education, training, unsubsidized employment or career advancement. 

  13. Who Took the GED? GED 1999 Statistical Report. (2000) Washington, D.C.: American Council of Education, Center for Adult Learning Publications.

  14. Tyler, 2001, ibid.

Updated 7/27/07 :: Copyright © 2005 NCSALL