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

51 Pages Posted: 17 Sep 2004

See all articles by Magnus Lofstrom

Magnus Lofstrom

Public Policy Institute of California; Institute for the Study of Labor (IZA)

John H. Tyler

Brown University - Taubman Center for Public Policy; National Bureau of Economic Research (NBER)

Date Written: September 2004

Abstract

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.

Keywords: GED, returns to education, natural experiment

JEL Classification: I2, J31

Suggested Citation

Lofstrom, Magnus and Tyler, John H., Measuring the Returns to the Ged: Using an Exogenous Change in Ged Passing Standards as a Natural Experiment (September 2004). IZA Discussion Paper No. 1306. Available at SSRN: https://ssrn.com/abstract=592321

Magnus Lofstrom (Contact Author)

Public Policy Institute of California ( email )

500 Washington Street
Suite 800
San Francisco, CA 94111
United States

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany
+49 228 3894 303 (Phone)
+49 228 3894 210 (Fax)

John H. Tyler

Brown University - Taubman Center for Public Policy ( email )

Providence, RI 02912
United States
401-863-1036 (Phone)
401-863-1276 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
71
Abstract Views
1,090
rank
322,618
PlumX Metrics