Do High School Dropouts Benefit From Obtaining a GED?

Abstract

This article uses longitudinal data from the National Longitudinal Survey of Youth for the years 1979-1991 to study whether male high school dropouts’ trajectories of wages, annual number of hours worked, and annual earnings are affected by acquisition of the General Educational Development (GED) credential. Our analysis takes into account potential heteroscedasticity and possible autocorrelation among the error terms pertaining to different years of longitudinal data on the same individual. We find that acquisition of the GED is associated with an increase in the rate of wage growth. Our findings are consistent with the hypothesis that some dropouts, after obtaining a GED, search for a better paying job or enter a training program.