The Impacts of the GED Credential and Regular High School Diploma on the Employment, Unemployment, Weekly and Annual Earnings, and Income Experiences of Native-Born Adults (16-74) in the U.S. in 2000, 2009, and 2010

During the past few decades in the United States, labor market and social success as well as civic behavior and personal economic and physical/mental well-being have become increasingly associated with one’s formal educational attainment, literacy/numeracy proficiencies, and occupational skills. Better educated adults, especially those with a Bachelor’s or higher degree, and those with stronger literacy/math skills and technical/professional/ managerial skills have achieved substantially better employment, wage, and annual earnings outcomes than their less educated and less literate peers. These growing disparities in individual earnings and incomes combined with widening gaps in marriage formation and stability across educational groups have led to increased income and wealth inequality among families and reduced economic mobility among the nation’s young.

While many studies of the growing economic importance of education have been focused on post-secondary education, especially Bachelor degree attainment, there has been a renewed focus on the labor market, earnings, and social problems of high school dropouts. Important changes in U.S. labor markets over the past few decades, including the forces of deindustrialization, technological change, declining unionization, globalization, and occupational restructuring, have taken a toll on America’s workers with no high school diploma, especially males who were overly dependent on well-paying blue collar jobs for their entry into the middle class. The nation’s younger adults (under 30) with limited education have been most adversely affected by these developments over the past decade.

The research findings appearing in this report build on the findings presented in earlier reports prepared by the Center for Labor Market Studies for the U.S. Department of Education’s Office of Vocational and Adult Education. The analysis of the effects of the GED certificate and the regular high school diploma on a wide array of employment, unemployment, weekly and annual earnings and family income outcomes are extended by conducting a set of multivariate statistical analyses of these outcomes. The models include multiple regression models, linear probability models, and logistic regression models. The report also estimates each of these models for an array of gender, age, race-ethnic, gender by race, gender by age, and regional geographic groups of native-born adults (16-74 years old) with no formal schooling beyond the high school diploma.

Across the board for all employment, unemployment, weekly and annual earnings, incomes, and public assistance measures, obtaining a GED or regular diploma significantly improved outcomes over both high school dropouts and primary school leavers. The higher personal earnings of better educated adults, their higher family incomes, and reduced dependence on cash public assistance income increases their net fiscal contributions to state and national government budgets. GED holders and high school graduates (and their employers) will pay more in Social Security payroll taxes, higher state and federal income taxes, more in state sales taxes, and higher property taxes at the local level due to increased rates of home ownership and higher valued homes. Further, their higher family incomes reduce their dependence on both cash and in-kind public assistance income, thus holding down the growth of public expenditures and fiscal deficits.