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Abstract

The author uses a unique data set constructed from Florida General Education Development certificate (GED) and Unemployment Insurance (UI) administrative records to estimate the relative earnings of two groups of male high school dropouts who took the GED exams in 1995: those who passed the exams, obtaining the credential, and those who failed the exams. Estimates from several different specifications all show greater mean quarterly earnings growth among those who obtained a GED than among unsuccessful candidates. The advantage was small in dollar terms—only about $1,400 annually, six years after the exams—but, given the very low initial earnings of these school dropouts, it was large in relative terms, growing from zero immediately after the 1995 exams to 13–20% six years later. Most of these gains appear to reflect not differential wage growth between the two groups, but a differential rate of movement from non-employment to employment.

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