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Do the Cognitive Skills of School Dropouts Matter in the Labor Market?

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  • John H. Tyler
  • Richard J. Murnane
  • John B. Willett

Abstract

Does the U.S. labor market reward cognitive skill differences among high school dropouts, the members of the labor force with the least educational attainments? This paper reports the results of an exploration of this question, using a new data set that provides information on the universe of dropouts who last attempted the GED exams in Florida and New York between 1984 and 1990. The design of the sample reduces variation in unmeasured variables such as motivation that are correlated with cognitive skills. We examine the labor market returns to basic cognitive skills as measured by GED test scores. We explore whether the returns differ by gender and race. The results indicate quite large earnings returns to cognitive skills for both male and female dropouts, and for white and non-white dropouts. The earnings payoff to skills increases with age.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7101.

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Date of creation: Apr 1999
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Publication status: published as Tyler, John H., Richard J. Murnane and John B. Willett. "Do The Cognitive Skills Of School Dropouts Matter In The Labor Market?," Journal of Human Resources, 2000, v35(4,Fall), 7480754.
Handle: RePEc:nbr:nberwo:7101

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  1. Joseph G. Altonji & Charles R. Pierret, 1996. "Employer Learning and the Signaling Value of Education," NBER Working Papers 5438, National Bureau of Economic Research, Inc.
  2. John H. Tyler & Richard J. Murnane & John B. Willett, 1998. "Estimating the Impact of the GED on the Earnings of Young Dropouts Using a Series of Natural Experiments," NBER Working Papers 6391, National Bureau of Economic Research, Inc.
  3. Joshua D. Angrist, 1998. "Estimating the Labor Market Impact of Voluntary Military Service Using Social Security Data on Military Applicants," Econometrica, Econometric Society, vol. 66(2), pages 249-288, March.
  4. Farber, Henry S & Gibbons, Robert, 1996. "Learning and Wage Dynamics," The Quarterly Journal of Economics, MIT Press, vol. 111(4), pages 1007-47, November.
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Cited by:
  1. McIntosh, Steven & Vignoles, Anna, 2001. "Measuring and Assessing the Impact of Basic Skills on Labour Market Outcomes," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 453-81, July.
  2. Ludger Woessmann, 2004. "How Equal Are Educational Opportunities? Family Background and Student Achievement in Europe and the United States," CESifo Working Paper Series 1162, CESifo Group Munich.
  3. Ludger Wößmann, 2001. "New Evidence on the Missing Resource-Performance Link in Education," Kiel Working Papers 1051, Kiel Institute for the World Economy.
  4. Vegard Skirbekk, 2004. "Age and Individual Productivity: A Literature Survey," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 2(1), pages 133-154.
  5. Jepsen, Christopher & Mueser, Peter R. & Troske, Kenneth, 2012. "Labor-Market Returns to the GED Using Regression Discontinuity Analysis," IZA Discussion Papers 6758, Institute for the Study of Labor (IZA).
  6. Laura Romeu Gordo & Andreas Motel-Klingebiel & Susanne Wurm, 2009. "SOEP as a Source for Research on Ageing – Issues, Measures and Possibilities for Improvement," Working Paper Series of the German Council for Social and Economic Data 83, German Council for Social and Economic Data (RatSWD).
  7. Niels-Hugo Blunch & Claus C Pörtner, 2005. "Literacy, Skills and Welfare: Effects of Participation in Adult Literacy Programs," Working Papers UWEC-2005-23-FC, University of Washington, Department of Economics, revised Aug 2009.
  8. Tyler, John H., 2004. "Basic skills and the earnings of dropouts," Economics of Education Review, Elsevier, vol. 23(3), pages 221-235, June.
  9. Fisher, Monica G., 2005. "Why Is U.S. Poverty Higher In Nonmetropolitan Than Metropolitan Areas? Evidence From The Panel Study Of Income Dynamics," Working Papers 18904, Oregon State University, Rural Poverty Research Center (RPRC).
  10. Teraji, Shinji, 2011. "An economic analysis of social exclusion and inequality," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(3), pages 217-223, May.
  11. Tyler, John H. & Murnane, Richard J. & Willett, John B., 2004. "The devil's in the details: evidence from the GED on large effects of small differences in high stakes exams," Economics of Education Review, Elsevier, vol. 23(4), pages 339-349, August.
  12. Vegard Skirbekk, 2003. "Age and individual productivity: a literature survey," MPIDR Working Papers WP-2003-028, Max Planck Institute for Demographic Research, Rostock, Germany.
  13. Mañé Vernet, Ferran & Miravet, Daniel, 2010. "An investigation on the pay-off to generic competences for core employees in Catalan manufacturing firms," Working Papers 2072/179595, Universitat Rovira i Virgili, Department of Economics.

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