Economic Impact of the GED

Getting a GED has considerable – and invaluable – impact on recipients’ self-esteem, but relatively minor impact on income, unless it is used as a key to entry into further education and training. We need to know that, students need to know that, and we all need to act on that knowledge.
-- from an article by Barbara Garner titled "What Impact Does the GED Have Upon Earnings?", published in SABES/World Education's quarterly newsletter Bright Ideas, Vol. 6, No. 4. Spring 1997.

Cognitive Skills Matter in the Labor Market, Even for School Dropouts [PDF document. Please download the Adobe® Acrobat® Reader (free) to view PDF documents.]
John H. Tyler, Richard J. Murnane, and John B. Willett (April 2000). Cambridge, MA: National Center for the Study of Adult Learning and Literacy. From the Executive Summary: "While the average cognitive skill level of school dropouts is quite low, there is considerable variation among dropouts in cognitive skill levels. ... One could argue that, in an economy in which basic cognitive skills are increasingly valued, differences in skills would translate into earnings differences for dropouts just as they do for [non-dropouts] ... On the other hand, the economic trends that have depressed the average earnings of the less skilled may have relegated most young dropouts to entry level jobs where skills matter very little. ... This report presents evidence on the labor market payoff to cognitive skills for school dropouts, and whether the payoff differs by gender and race/ethnicity."

Economic and Noneconomic Outcomes for GED Credential Recipients,
Song, Wei and Hsu, Yung-chen (March 2008). Washington, DC: General Educational Development Testing Service. [Download Adobe® Acrobat® Reader to view this document]
The GED Tests are widely used to certify a high school level of academic knowledge and skills. The popularity and profound influence of the GED Tests have solicited numerous studies on the outcomes of obtaining a GED credential. Most studies on labor market outcomes for GED credential recipients have targeted specific groups for comparisons across age, gender, or geographic areas. Depending on the samples used and the research methodologies applied, the studies have yielded mixed results. Furthermore, scholars have noticed a scarcity of research on the noneconomic outcomes of GED credential recipients, such as their social participation, health, and parenting skills. This study provides evidence through a recently released nationally representative sample of adults, the 2003 National Assessment of Adult Literacy (NAAL), on the economic outcomes as well as the noneconomic outcomes for GED credential recipients. On the economic outcomes, this study examines labor force participation, work history, weekly wage, and personal income. On the noneconomic outcomes, this study looks into political and social participation, family literacy, and health.

Economic Benefits of the GED [ Download Microsoft® Word reader to view this document.]
Gail Cope, Mary Ziegler, Donna J.G. Brian (August 2001). Knoxville, TN: Center for Literacy Studies. Prepared for the Tennessee Department of Human Services, this report concludes that: 1) For both men and women, there is a direct, positive relationship between educational attainment and earnings; 2) For both women and men, there is a direct, positive relationship between educational attainment and employment rates; 3) Educational attainment makes a bigger difference in earnings and employment rates at the upper levels of educational attainment, and the difference is even more pronounced for women than for men; 4) For women, acquisition of the GED credential is associated with an initially modest increase in earnings, but earnings increases grow substantially over time; and 5) Attainment of the GED (for women) is also associated with more time working, less job turnover, and additional education and training.

Economic Outcomes of High School Completers and Noncompleters 8 Years Later [PDF document. Please download the Adobe® Acrobat® Reader (free) to view PDF documents.]
Gregory Kienzl and Grace Kena. Washington, DC: Institute of Education Sciences, National Center for Education Statistics, October 2006. This Issue Brief uses data from the National Education Longitudinal Study of 1988 (NELS:88) to compare the economic outcomes of high school completers at three different points in time with the outcomes of individuals who did not complete high school. Differences by sex and the type of credential earned are also examined. The findings suggest that individuals who completed high school within 6 years generally had more favorable economic outcomes than their counterparts who completed high school later or not at all. Conversely, few differences in economic outcomes were found between high school diploma and alternative credential holders at both the 4- and 6-year and later completion points. Differences in economic outcomes, however, were most prominent between males and females even after controlling for the timing and type of high school credential earned.

Estimating the Labor Market Signaling Value of the GED
John H. Tyler, Richard J. Murnane, and John B. Willett (June 2000). Cambridge, MA: National Center for the Study of Adult Learning and Literacy. While many previous studies have examined the economic impact of the GED on labor market outcomes, the results from these studies are all based on regression analyses that employ questionable comparison groups. As a result, all previous studies of the economic impact of the GED likely suffer from “selectivity bias.” Most of these past studies have found small or no effects of the GED on the labor market outcomes of dropouts. Using new and powerful data and a methodology that relies on interstate variation in GED passing standards to address selectivity bias issues, we find that the GED has a large impact on the earnings of young white dropouts who chose to obtain the credential and whose scores place them on the margin of passing. Our estimates are robust across several different “natural experiments” we can employ, as well as to a series of specification checks. While we find no statistically discernible effect of the GED on the earnings of young minority dropouts, this does not rule out a positive impact of the GED on higher scoring minority dropouts nor a positive impact on the earnings of minorities via a human capital route.

Evidence from Florida on the Labor Market Attachment of Male Dropouts Who Attempt the GED: A NCSALL Research Brief [PDF document. Please download the Adobe® Acrobat® Reader (free) to view PDF documents.]
John H. Tyler (July 2005). Cambridge, MA: National Center for the Study of Adult Learning and Literacy. This brief highlights key findings from a study that examined the labor market attachment of male dropouts who obtained the GED credential in Florida between 1994 and 1998. Tyler compared these credentialed dropouts to the men who attempted, but failed, the GED exam during the same period. Credentialed dropouts had a higher probability of being employed one year after the exam -- a difference that persisted two years later. Among individuals who were unemployed in the quarter during which they took the tests, GED passers found jobs faster. Tyler also found that passing the tests is linked with more stable work histories for Anglo-American dropouts.

The General Educational Development (GED) Credential: History, Current Research, and Directions for Policy and Practice
John H. Tyler (2005). Cambridge, MA: National Center for the Study of Adult Learning and Literacy. In this chapter from Volume 5 of NCSALL's Review of Adult Learning and Literacy, John Tyler reviews the recent research on the impact of acquiring a General Educational Development (GED) credential. He first presents a history of the GED credential itself, and its growth and evolution since the 1940s. Then, he describes recent research on the impact of the GED, highlighting four key findings: 1) the GED may encourage some high school students to leave school early; 2) the economic payoff of the GED accrues only to dropouts who leave school with low skills; 3) the economic payoffs to the GED take time to accrue; 4) and postsecondary education and training are fruitful but little-used routes to economic success for GED holders. Tyler concludes the chapter with a set of recommendations for policy, research, and practice. With respect to policy, he calls for tighter links between GED programs and postsecondary and training institutions to encourage more adult learners to continue their education beyond GED acquisition. In addition, he suggests the possibility of awarding certificates to learners at levels below the GED as an incentive to continue their learning en route to the GED.

Is the GED Valuable to Those Who Pass It? - This article was published in the first and only April 2003 issue of Focus on Policy, a publication of the National Center for Study of Adult Learning and Literacy that "translated" research findings into implications for policy.

The Literacy of U.S. Adults with GED Credentials: 2003 NAAL and 1992 NALS [PDF document. Please download the Adobe® Acrobat® Reader (free) to view PDF documents.]
Yung-chen Hsu and Carol E. George-Ezzelle (April 2007). Washington, DC: GED Testing Service, American Council on Education. In this paper presented at the annual conference of the American Educational Research Association (AERA), Hsu and George-Ezzelle describe a study in that used data from the 2003 National Assessment of Adult Literacy (NAAL) and the 1992 National Adult Literacy Survey (NALS) to provide evidence of the academic value of the GED. According to the study, adults with GEDs have literacy scores about equal to those of adults with high school diplomas who did not go on to postsecondary education. GED holders displayed significantly better scores on prose, document, and quantitative literacy tasks than did adults with less than a high school education, or just some high school.

Research Synthesis: Educational and Labor Market Performance of GED Recipients
David Boesel, Nabeel Alsalam, and Thomas M. Smith (1998). Washington, DC: Office of Educational Research and Improvement, U.S. Department of Education. While many good syntheses of education research have been produced over the years, many topics have not yet been covered. In response to this need, the National Library of Education (NLE) has undertaken a series of research syntheses on issues of public concern in education. Based on published literature identified through traditional bibliographic searches, ERIC, and other Internet sources, and on unpublished Ph.D. dissertations and research reports available to NLE, the syntheses are designed to be empirical, even-handed, and as comprehensive as possible. This study of the performance of General Educational Development (GED) recipients is the first synthesis in the series. The result of a great deal of careful research, it should be especially useful to those concerned with the education of adults and out-of-school youth. Report is interesting in that it talks about not only labor market performance of GED recipients, but also these other functions of the GED: The GED as a Stimulus to Human Capital Investment; Measuring and Assessing Cognitive Skills; The GED as a Sorting Procedure; The GED as Certification; and The GED as Self-Confidence Builder.

So You Want a GED? Estimating the Impact of the GED on the Earnings of Dropouts Who Seek the Credential [PDF document. Please download the Adobe® Acrobat® Reader (free) to view PDF documents.]
John H. Tyler (May 2001). Cambridge, MA: National Center for the Study of Adult Learning and Literacy. This paper studies the impact of a GED on the earnings of high school dropouts. While the earnings increased over time, the immediate effect was not as obvious. The difference in earnings by race are also addressed as well as earning the GED while incarcerated.

Transitioning Adult Learners to College

Beyond the GED: Making Conscious Choices About the GED and Your Future: Lesson Plans and Materials for the GED Classroom [PDF document. Please download the Adobe® Acrobat® Reader (free) to view PDF documents.]
Fass, Sandra and Garner, Barbara (2006 Update).
Cambridge, MA: National Center for the Study of Adult Learning and Literacy.
Revised by Eileen Barry in 2006 from the original 2000 guide to include new data and information on the Internet, this guide for GED instructors offers lesson plans and helps teachers develop as professionals. GED instructors are often working with people who are interested in getting their GED because they hope or believe it will be the key to their economic futures. This set of classroom materials is designed to provide GED preparation learners with practice in graph and chart reading, calculation, analyzing information, and writing, while they examine the labor market, the role of higher education, and the economic impact of the GED. The intent is to prepare learners to make wise decisions about their work lives as well as being better prepared to pass the GED. It also gives adult learners an opportunity to practice writing, use graphs, read charts, and analyze research findings on the economic impact of the GED.

Examinee and High School Senior Performance on the GED Tests
George-Ezzelle, Carol E. and Hsu, Yung-chen (2007). Washington, DC: GED Testing Service of the American Council on Education. “The results in this report have shown that candidates who passed the GED Tests met and, in many test areas, exceeded performance standards exceeding that of the lower 40 percent of graduating high school seniors.” This statement and much additional information can be found in this report.

National College Transition Network
This Web site was developed as a joint effort by the New England Literacy Resource Center and the Nellie Mae Education Foundation to provide an online resource for Adult Basic Education providers who wish to implement an effective college transition program in their community.

Transitioning Adults to College: Adult Basic Education Program Models [PDF document. Please download the Adobe® Acrobat® Reader (free) to view PDF documents.]
Cynthia Zafft, Silja Kallenbach, and Jessica Spohn (August 2006). Boston, MA: National Center for the Study of Adult Learning and Literacy. Paper describes five models that the staff at the New England Literacy Resource Center at World Education, Inc., categorized through a survey of adult education centers with transition components from around the United States. This NCSALL Occasional Paper describes the five models — Advising, GED-Plus, ESOL, Career Pathways, and College Preparatory — and themes and recommendations that others contemplating adult transition services might find helpful. It also chronicles the experiences of four states (Connecticut, Kentucky, Maine, and Oregon) in their efforts to institutionalize transitions for adults.