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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:
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Studying to pass the GED results in gains in "human capital" that might be rewarded in the job market.
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Using the GED to gain access to post-secondary education
and training leads to better paying jobs. -
Signaling to employers that a GED holder may have higher academic skills, positive attitudes, motivation, and commitment to work than other school dropouts leads to employment.
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
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Policymakers should work to increase funding for efforts that discourage high school students from dropping out in order to get their GED. The best choice for most high school students is to stay in school. The national high school dropout rate is currently 10.9 percent, and over the last decade, between 347,000 and 544,000 students left school each year. In the 1999/2000 academic year, 488,000 students dropped out of high school. The dropout rate was 6.9 percent for whites, 13.1 percent for blacks, and 27.8 percent for Hispanics.8
The response of the federal government to this problem is the School Dropout Prevention Program, authorized by Title I, Part H of the Elementary and Secondary Education Act as reauthorized by the No Child Left Behind Act of 2001. This program provides grants to state and local educational agencies to support school dropout prevention and reentry activities. According to the U.S. Department of Education, these activities must employ strategies that are evidence-based, widely replicable, and sustainable. Approximately $10 million was awarded in grants in FY 2002. Considering the scope of the problem and the size of the federal education budget (over $30 billion annually), a much more substantial investment in this area should be carefully considered.
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. |
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Adult education programs should focus more resources on low-skilled GED students. Policymakers could make additional funding available for GED programs to focus on low-skilled students, who need more resources to pass the GED tests than do high-skilled students. Since many welfare recipients have low academic skills,10 new welfare legislation might include incentives for participation in intensive GED preparation programs, so that welfare recipients do not cycle in and out of low-skilled, low-paying jobs.
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Policy makers should support a change in Workforce Investment Act (WIA)11 legislation that identifies GED programs for low-skilled adults as a priority. WIA legislation recognizes receipt of either a secondary school diploma or its recognized equivalent as one of three core indicators of performance12 that state education agencies must use in their accountability systems. Programs, therefore, have an incentive to serve students who are most likely to pass the GED test, those with high skills. Programs could be allowed to count low-skilled GED graduates as worth more in terms of accountability.
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Policy makers could add a component to WIA that supports GED to postsecondary transition. Over 65 percent of the GED examinees in 1999 indicated that they were obtaining the credential in order to pursue further education.13 Yet only 30 to 35 percent of GED holders obtain any postsecondary education, and only 5 to 10 percent obtain at least a year of postsecondary education. Many more GED holders accumulate hours in proprietary school training where, according to Tyler,14 the evidence of financial benefits is not encouraging. GED holders may face barriers to success in education beyond the GED that could be addressed by services that might be situated in adult education programs or postsecondary institutions.
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Policy makers should fund research that identifies ways to prevent dropout, improve the skill-building component of GED programs, and increase the number of GED holders who successfully pursue postsecondary education and training. Such research should evaluate model education programs and identify policies or interventions that remove barriers that make it harder for GED holders to enroll and succeed in postsecondary education.
The GED Reduces Recidivism, Saves Money, and Reduces Crime By Steve
Steurer, 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.
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. |
References
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Cameron, S.V. & Heckman, J.J. (1993) The Nonequivalence of High School Equivalents, Journal of Labor Economics, 11(1), 1-47.
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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.
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Boudett, K.P. (2000). "Second chance" strategies for women who drop out of school. Monthly Labor Review, December: 19-31.
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Tyler, 2001, ibid.
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Murnane, et al., 1999, ibid.
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Murnane, et al., 1999, ibid.
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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).
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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".
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NCES, 2000, ibid.
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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.
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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.
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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.
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Who Took the GED? GED 1999 Statistical Report. (2000) Washington, D.C.: American Council of Education, Center for Adult Learning Publications.
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Tyler, 2001, ibid.